Ask a chief financial officer about how 2023 is going and you’re bound to hear a lot about high-interest rates, a sour labor climate, and the condition of the economy overall. What’s surprising is that on top of those challenges, CFOs may also say the challenges they’re facing are surmountable and that profits for the year are still within reach.
In fact, that’s exactly what the tax advisory firm Grant Thornton heard when they asked U.S. CFOs how they viewed the landscape in the last quarter of 2023.
Chief financial officers “are focused on profitability despite the uncertain interest rate outlook and global economy,” Grant Thornton reported in the company’s Q3 2023 CFO Survey.
Overall, 28% of financial executives say they’re “pessimistic” about the economy – that’s up from 21% in the most recent CFO survey.
76% of finance leaders predict net profit growth and over 52% note their companies will realize profits of more than 5%. That would constitute a profit growth of 9% boost from the second quarter of 2023. A 5% profit rise would also be a six-quarter high according to Grant Thornton.
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The Q3 Grant Thornton CFO Survey – At a Glance
— 76% of CFOs predict net profit growth
— 45% said they were confident in meeting their supply chain needs
— 88% are already using or are trying to use generative AI
— 47% expect their operations costs to increase
— 70% will have AI implemented in their finance processes within the next year
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“This is the current environment, where supply chain management is an ongoing complication and managing the workforce is going to be challenging,” noted Grant Thornton national managing principal of CFO Advisory Paul Melville. “However, CFOs are continually adjusting to dealing with those two issues now.”
AI Emerges As a Big Priority
Artificial intelligence is also at the core of CFO strategies heading into 2024.
The study found that financial executives are increasingly relying on technology to solve a “variety of challenges, including supply chain woes, and finance leaders are consistently in search of the best technology-enabled solutions,” Grant Thornton stated.
AI is the technology that’s generated the most buzz and the most investment in the third quarter of 2023. In the past 90 days, 43% of U.S. CFOs say their organizations are currently using generative AI in some capacity, up from 30% in Q2.
Another 45% of surveyed CFOs told Grant Thornton “They’re exploring potential use cases for generative AI”. Another 57% of CFOs say their companies are training staffers on how to use generative AI in the workplace to make quick data decisions, weigh company risk, and size up corporate capital opportunities. That figure is up from 49% in the second quarter of 2023.
“AI’s popularity is growing and growing quickly,” Melville notes. “Now that CFOs are more comfortable with the supply chain and workforce issues, they’re looking at how they can drive the business. And they’re focusing on technology upgrades to deliver that ROI.”
One issue vexing CFOs is the rising cost of adding new technologies like AI, machine learning, and cloud software compatibility.
“CFOs understand they’ll have to spend money to take advantage of these technological opportunities, and that finding the most efficient and effective technologies with a high return on investment is a priority,” Grant Thornton noted. “In fact, more than half (58%) of finance leaders expect to increase their spending on IT/digital transformation — this represents the highest percentage since Q1 2021 at 60%.”
Brian O’Connell, a former Wall Street bond trader and best-selling author, is a prominent figure in the finance industry. With a substantial background as an ex-Wall Street trader, he has authored two best-selling books: ‘The 401k Millionaire’ and ‘CNBC’s Creating Wealth’, demonstrating his profound knowledge of finance and investing.
Brian is also a finance and business writer for esteemed national platforms and publications, including CNN, TheStreet.com, CBS News, The Wall Street Journal, U.S. News & World Report, Forbes, and Fox News.
