2013 American Express/CFO Research: Valuable Turn for Finance

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For A Valuable Turn for Finance, CFO Research surveyed 275 senior finance executives at U.S. companies with annual revenue of $4 million to $2 billion in manufacturing, wholesale, retail, financial services, professional services, health care, hospitality, media and other industries.

Here are some major business themes emerging this year, as identified in the report:

Offering value to customers by getting it from suppliers - To hang onto customers, mid-sized companies are lowering rates, running giveaways and undertaking other promotions. But three-quarters of companies surveyed say they’re also offering value by seeking more of it from their own suppliers in the form of rebate programs, co-op advertising dollars, and promotions.

Increasing spending, but pegging it to company goals - Following the value trend, mid-sized companies expect to maintain or ramp up spending this year, with close to half (45 percent) aiming to extract more value from vendors and suppliers. One manufacturer created a cross-functional team responsible for reducing costs by analyzing the value of purchases against the company’s top business initiatives.

Vigorously vetting vendors - In their pursuit of value, mid-sized companies are giving vendors a closer look, including re-negotiating contracts or re-examining them for ways to trim costs, pushing business units to use preferred vendors, and comparison shopping for new suppliers more frequently. One wholesale/retail company CFO arranges periodic all-day meetings between senior executives and key suppliers to set expectations. Funding growth with cash from operations - Though the economy has improved, credit is still hard to come by, leading 82 percent of companies surveyed to say they’ll rely on cash from operations as their primary source of growth capital over the next two years. To get there, finance executives say they’ll continue to push on collections, payables and inventory management. This year, 38 percent of companies surveyed say improving receivables performance is their highest priority.

Using ‘float’ to manage cash - In their quest to do a better job of forecasting cash flow, finance executives are making greater use of credit- or purchasing-card “float.” In the report, 38 percent of companies surveyed increased how often they used float in the past year, and 42 percent said they will use it more often in the coming year.