A new report has provided a reality check on the business sector’s response to the continuing pandemic and subsequent restrictions. The survey of Australian CFOs – conducted just before the arrival of Omicron – has revealed that 67 per cent of businesses will reduce or maintain the same level of spend in 2022 as this year, indicating that much of the business sector’s focus will be maintaining revenue or recouping losses, rather than growth. CFOs revealed market impacts were mostly influencing their spending decisions.
The report, titled ‘CFO Goals for 2022: Tech, team, and leadership’, was based on a survey of 210 Australian CFOs and released by DiviPay, Australia’s first all-in-one virtual corporate card and expense management platform. Half of the CFOs surveyed (50 per cent) indicated they would maintain the same level of spend next year as this year, while 18 per cent said they would decrease spend.
More CFOs in smaller businesses are hesitant to increase spending next year. The findings show just a fifth (19 per cent) of CFOs in businesses with up to 15 employees plan to increase business spend in 2022, compared with 39 per cent of CFOs in businesses with 16-50 employees and 52 per cent of those in larger businesses with more than 200 employees (up to 1,000). The pandemic has hit small businesses that lack the financial cushion larger businesses enjoy particularly hard, and these findings marry up with that experience.
The majority of CFOs indicated that the top considerations impacting their spending are external. DiviPay asked respondents to identify the areas that were likely to influence a change in spend at their organisation in 2022. Almost half (45 per cent) said market changes due to the pandemic were most likely to influence a change in business spend, while 38 per cent said supplier costs would impact their decision.
A third (36 per cent) of respondents revealed the use of better technologies, automation and system improvements would influence a change in business spend, while 35 per cent said business growth and 34 per cent said employees working from home, would have an impact.
CFOs are clearly taking a reactive stance on business spend going forward, a reflection of risk aversion and a conservative approach from many businesses in the current climate.
It’s clear that COVID-19 restrictions and the effect on the economy won’t be forgotten in a hurry. But if the pandemic has dented business confidence and left an indelible mark on the Australian psyche, CFOs should still be highly sensitive to both opportunities and threats in the market. Savvy business leaders will use the market upheaval to harness new opportunities and grow their business in 2022.
Daniel Kniaz, CEO at DiviPay observes:
‘While many CFOs are holding steady or decreasing spend in 2022, a significant proportion are looking to invest in their tech. CFOs would be wise to evaluate their current systems and consider a solution that provides transparency and visibility across the business, including real-time transaction feeds and automated expense reports. CFOs who aren’t planning to increase spend should think critically about where they will be spending money in 2022, to ensure they’re not left behind their competition.’
The DiviPay ‘CFO Goals for 2022: Tech, team, and leadership’ report, contains spending insights for CFOs, as well as views on what’s draining their time and the areas of their organisation they would like to improve and automate in 2022.