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Author's profile photo Wayne Banks

5 Big Ticket Items for CFOs and Business in 2023


The past few years have been challenging for Australian business owners, with global economic certainty, slowing market conditions, and a shrinking labor market. So far in 2023, we’ve seen many of these trends continue to strengthen.

Understanding the top 5 items at the forefront of discussions is essential to position your business for success in 2023 and beyond. As CFOs and members of the finance team, controlling these factors falls on you, making it important that you find the right resources to minimize risk and push toward your operational and financial objectives.

These 5 items could apply to any country in the global economy in some way or another. This is written with an Australian lens.

#1: Recession Fears

Recession fears have been lingering for some time now, especially in a post-pandemic world where inflation and interest rates continue to climb. Global economic growth remains less than average, slowing to 2.7% in 2023 from 6.0% in 2021.

Your sales department might be experiencing drops in sales while your purchasing department might be footing higher material bills. Controlling these factors is essential to maintain profitability and business growth. This balancing act will take more detailed and dynamic forecasting across organisational silos than ever before (often referred to as Extended Planning and Analysis (xP&A) What is extended planning and analysis (xP&A)? | SAP Insights

#2: The Labor Market

Coming out of the Great Resignation, countless CFOs are struggling to find the right talent. The Australian Bureau of Statistics reported a 4.9% drop in employment vacancies from August to November of last year.

Whether you are taking a proactive approach and cutting costs in the form of labor or can’t locate the right talent, navigating the labor market is a growing concern for Australian CFOs and finance teams. SAP HXM solutions are assisting customers with all aspects relating to staffing needs including attraction, onboarding, retention and much more. RISE with SAP for Human Experience Management (HXM)

#3: The Cash Rate

The cash rate is influenced by multiple factors including global activity and inflation within Australia. The Reserve Bank of Australia has adjusted the cash rate 11 times in the past year, with more hikes in the distant future.

Increases in the cash rate make it more difficult to finance important sectors of your organization, such as a new piece of equipment or an expansion initiative. Now might be the right time to explore other financing options, such as raising capital or taking on outside investors.

Consideration here could be given to end to end cash and working capital management, possibly Accounts Receivable financing or Accounts Payable discounts for early payment terms.Working Capital Management Solutions | Taulia

#4: Residential Real Estate

As a CFO, you might not be too concerned with the residential real estate market, but there are underlying ties to the corporate world that you need to be aware of. One of the primary purposes of cash rate increases is to slow the residential real estate market.

This in turn makes it more expensive for your business to borrow funds from financial institutions. Keeping an eye on the residential real estate market can be a great indicator of where cash rates are headed and how your business can prepare.

#5: Inflation

Inflation makes the cost of running a business more expensive. Annual inflation rates declined in Q1 of 2023 to 7.0%, down from the 30-year high of 7.8%. CFOs and finance teams need to factor inflation into pricing and business decisions.

If you kept sales prices the same but had to pay nearly 8% more for materials and wages, you would experience an 8% decline in profitability. Economists predict inflation to hover around 4.5% by the end of 2023.

Why it Matters

Running a business isn’t always as clear-cut as CFOs and finance professionals would hope. This is why it’s important to partner with the right resources that can help you track these items and more.

First, you want to be sure you have up-to-date technology, like an SAP system, that alleviates manual tracking pressure on your team. A “clean core” of data to then leverage from is mission critical for timely, accurate business decision making.

Next, you want to partner with an advisor that can find effective solutions to combat these challenges. Whether you need a one-time strategy or ongoing advice, reach out today to set up a consultation.


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