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Deep dive: Deloitte UK CFO Survey Q4 2023

Vasco Rodrigues
Vasco Rodrigues

In an economic landscape marked by uncertainty and complexity, CFOs face an array of challenges that demand both caution and strategic foresight. The Deloitte UK CFO Survey for Q4 2023 offers a revealing glimpse into these challenges, highlighting the concerns of CFOs in the current financial climate. In response to these challenges, the role of sophisticated financial tools like reconciliation software such as Aurum Solutions becomes increasingly critical.  

Deep Dive into the Deloitte UK CFO Survey Q4 2023: A Tale of Caution and Concern  

The Deloitte survey paints a picture of a financial world fraught with uncertainty and risk. CFOs report a heightened sense of caution, with many indicating significant concerns over financial risks on their balance sheets. The data reveals a stark reality: a majority of CFOs have witnessed an increase in financial risk, predominantly due to uncertainties in asset valuations and sensitivities to interest and exchange rates.  

Moreover, the reluctance to embrace risk is palpable. An overwhelming majority, hovering around 90% in each quarter of 2023, responded negatively to the idea of taking on greater risks. This conservative stance underscores the need for tools that can provide better risk assessment and management.  

When it comes to external funding, the survey shows a clear trend of apprehension. Bank borrowing, traditionally a go-to source, has seen a decline in attractiveness, with a net negative balance observed throughout 2023. Similarly, corporate bonds are viewed with scepticism. Even equity, which offers a potential lifeline, received mixed responses, indicating a lack of consensus on its viability.  

These numbers tell a story of a financial landscape in flux, where CFOs are navigating a tightrope of maintaining financial health while mitigating risks.  

Key Insights

  • Stance on Taking Risks: CFOs appear to be predominantly against taking greater risks, with a significant majority (ranging from 81% to 90% across different quarters) saying no, indicating a conservative approach towards risk-taking in the current economic climate. Despite that, sentiment among UK CFOs rose for the second consecutive quarter and is running at well above average levels. Corporate risk appetite, though subdued relative to long term measures, has risen to an 18-month high.
  • External Funding Sources: The survey also assessed CFOs' views on different sources of external funding for UK corporates:
  1. Bank Borrowing: Bank borrowing was generally viewed less favourably, with a considerable proportion of CFOs finding it somewhat unattractive or very unattractive as a source of funding. The net balance was negative across all quarters of 2023, suggesting a general reluctance towards bank borrowing.
  2. Corporate Bonds: Corporate bonds were also seen less favourably, with a significant number of CFOs rating them as somewhat unattractive or very unattractive. The net balance was consistently negative throughout 2023.
  3. Equity: Equity as a source of funding received mixed responses. While there were CFOs who found it attractive, a notable percentage viewed it as unattractive. The net balance was negative for all quarters of 2023, indicating that equity was not the most preferred source of external funding among CFOs.
  • Inflation: The rate worries that have dominated the CFO Survey for much of the last two year have eased since our last survey in September with respondents expecting price and wage pressures to soften over the next two years.
  • Near-term risks: CFOs remain focussed on cutting costs and building up cash rather than hiring, capital spending or M&A. Perceptions of external financial and economic uncertainty have risen, and are running at above-average levels. CFOs think geopolitics poses the greatest external risk to their own businesses over the next 12 months.
  • Costs & Investment: CFOs expect labour costs to remain elevated in the long term, something which helps explain why CFOs also expect to see sustained businesses investment in new technology.

The Role of Reconciliation Software in Mitigating Financial Risks  

In this context, Aurum Solutions emerges not just as a tool, but as a vital ally for CFOs. Its suite of reconciliation tools addresses the core areas of concern highlighted in the Deloitte survey:

Enhancing Accuracy and Reducing Errors  

Aurum Solutions' prowess lies in its ability to automate and streamline the reconciliation process, significantly reducing manual errors. This accuracy is crucial for CFOs who need reliable data to make informed decisions amidst a volatile market.

Streamlining Operations for Efficiency

The efficiency offered by Aurum Solutions is a lifeline for time-strapped finance teams. By automating laborious reconciliation tasks, it frees up resources, allowing teams to focus on strategic risk assessment and exploring nuanced funding options.

Strengthening Compliance and Audit Preparedness

In an era where compliance is critical, Aurum Solutions offers peace of mind by maintaining clear, auditable records of financial transactions. This not only ensures adherence to regulations but also simplifies the audit process, reducing the risk of costly fines and saving time.

Providing a Comprehensive Financial Overview  

Aurum Solutions integrates data from diverse sources, presenting a unified view of a company's financial status. This holistic view is essential for CFOs to make data-driven decisions, especially when evaluating varied external funding sources.  

Supporting Strategic Financial Planning

Equipped with advanced capabilities, Aurum Solutions aids CFOs in strategic planning by providing accurate and timely financial data. This aligns perfectly with the concerns raised in the Deloitte survey, offering a pathway to forecast future financial needs and identify opportunities.

Automated reconciliation – a path through uncertainty  

The Deloitte UK CFO Survey for Q4 2023 underscores a cautious approach towards financial risks and external funding. In this scenario, reconciliation software like Aurum Solutions is indispensable. It addresses not only the immediate concerns of accuracy and compliance but also bolsters strategic decision-making and risk management. By adopting such advanced financial tools, CFOs can effectively and confidently navigate the complexities of today's economic environment.

Take a positive first step in uncertain times by booking your Aurum demo today.

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