CFO Magazine: 80% of CFOs Expect Cost Pressures to Persist Into Next Year: Weekly Stat

“As inflation rises and the quality of labor pools falls, financial executives must develop strategies, not only to juggle the external economic elements bearing down on their companies, but to remain proactive in efforts to sustain growth.”

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CFO Insights: How CFOs Can Rise to Meet the Challenge of Soaring Inflation

“According to one Deloitte analysis, the rewards of price increases often outweigh the risks. The analysis found that if a company with 35% gross margins raises prices by 5%, the company’s sales volume would need to fall by more than 12.5% for the price hike to impact contribution margin negatively. Of course, some competitors will likely hold the line on price increases to gain market share.”

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CFO Magazine: 4 Tips for Cutting Indirect Spend

“In light of price inflation, companies are weighing their options for cost transformation, said Mahoney. Cost transformation is about simplifying and refocusing the organization. It involves a soup-to-nuts analysis of any action taken by a company and deciding: Is this something we should build? Is this something we should deliver internally, or does it make more sense to buy or outsource to an external supplier?”

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CFO Journal: How CMOs and CFOs Can Collaborate on Pricing

“Pricing is critical—it touches everything in the organization. Companies should have a coordinating function that forces a dialog between CMOs and CFOs, and they should have the data, insights, and tools to support it.”

Read More at The Wall Street Journal >

CFO Journal: Supply Chain Snarls Throw a Double Punch to Costs and Sales

“Among surveyed CFOs, 44% report that supply chain shortages or delays increased their companies’ costs by 5% or more. Nearly one-third (32%) note that their 2021 sales have fallen due to delays or shortages, with 28% expecting future sales this year to suffer. More than two-thirds of respondents (69%) indicate that their supply chains would become more diversified over the next three years, with 23% expecting greater vertical integration of their supply chains.”

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CFO Dive: Careful pruning, not blanket cuts, aids post-pandemic growth

“”During financial uncertainty, many business owners react on their gut,” Stephen King, president and CEO of GrowthForce, an outsourced bookkeeping, accounting and controller services, said. “This is the worst thing you can do, as it can lead to detrimental decisions you can’t pull yourself out of.”

Before making cost-cutting decisions, get the data you need and study above-the-line and below-the-line costs, advises King, a business owner who has survived five recessions. Data-intensive management reports will help clearly lay out those expenses.”

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RCA Institute: How Do You Prefer Your Costs – Fixed or Variable?

The RCA Institute asks the following questions about fixed or variable costs – Are they avoidable for the current decision? And, what’s my market risk and tolerance?

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Gartner: Build Cost Strategy Around Differentiating Factors, Not Competitive Trends

“Our research shows that CFOs are often blown off course by external targets that prioritize growth over profitability. Their targets, because they are externally focused, are routinely disrupted by changes to the macro picture. […] CFOs who model costs on differentiators are much more likely to stay on track with their long-term plans, avoid hasty cost-cutting in response to a change in the macro picture and realize value through principled and focused reinvestments built around their differentiators.”

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Four Traits of Effective Finance Leaders

“CFOs are expected to wear many hats: Strategic partner, relationship builder, change agent and technology champion. But ultimately, a CFO’s top priority is to ensure sustained financial performance for the organization.”

CFOs are under increasing pressure to do it all. To become more effective in their position, they must align their efforts with their organizations’ highest priorities and become personally effective at facilitating change and shaping their company’s strategy. This means finance leaders need to focus on fewer things, even as the organization makes more demands on their time. According to Gartner, “A CFO’s personal effectiveness is measured by their performance against their CEO’s financial expectations and how well their organization exhibits “efficient growth” behaviors.”

Gartner found that personally effective CFOs follow four common practices.

Read More at Smarter with Gartner >