A recent survey from Grant Thornton reveals a surge in optimism among chief financial officers (CFOs) about the U.S. economy. At 58 percent, this is the highest level of optimism since the third quarter of 2021.
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Grant Thornton’s Q2 2024 CFO survey highlights several positive trends. A record 63 percent of respondents expressed confidence in their organization’s ability to meet increased customer demand. Confidence levels were also high for meeting supply chain needs (62 percent), growth projections (56 percent), cost control goals (55 percent), and labor needs (55 percent).
Additionally, 75 percent of CFOs expect their net profit to grow over the next 12 months, and 69 percent anticipate revenue increases. However, with 67 percent expecting their expenses to rise, cost management remains a top priority, cited by 57 percent of respondents.
“Although most finance leaders are confident in their ability to control costs, it’s going to require significant focus,” said Paul Melville, national managing principal of CFO Advisory for Grant Thornton Advisors LLC. “The business environment is ripe for growth, but CFOs must manage costs to capitalize on it.”
The survey also shows an increased focus on AI and technology. In Q2, 94 percent of respondents were either using or exploring generative artificial intelligence (AI), particularly for cybersecurity and risk management. Consequently, technology upgrades (39 percent) and cybersecurity (37 percent) are the biggest challenges for CFOs. The top areas for expense increases over the next 12 months are IT/digital transformation (64 percent) and cyber risk/security (62 percent).
“Cybersecurity is an area that every company has to continually address,” said Mike Notarangelo, partner and Private Equity Audit & Assurance leader at Grant Thornton LLP. “There’s a sharpened focus on it in the public markets given the recent SEC cybersecurity rules and some notable breaches in the past few years.”
Inflation and digitalization pressures are significant burdens for CFOs aiming to control costs. Over one-third (37 percent) identified materials costs as a potential area for cuts, suggesting optimism that inflation may subside soon. Human capital expenses related to employee headcount and compensation levels are also under scrutiny, with 47 percent identifying workforce rationalization as a top focus for the next six months, up 14 percentage points from the previous quarter.
“Across the board, general and administrative costs are under a microscope,” Notarangelo said. “Accounting and finance teams are focused on maintaining appropriate levels of talent while using technology to optimize processes.”
Despite these challenges, 58 percent of finance leaders prioritize attracting and retaining key talent over the next 12 months. However, budget constraints pose a significant challenge in recruiting. Still, 91 percent of finance leaders are satisfied with their organization’s talent strategy, and 89 percent believe their technology platforms enhance employee efficiency.
“People are trying to do more with less,” said Jim Wittmer, the managing principal of Grant Thornton’s Atlantic Coast region. “There’s a willingness to spend on technology because it can lead to greater efficiency down the line, but there’s definitely a cost rationalization element in the market right now.”
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