Keywords: shared services, finance shared services, CFO, Commercial Payment Solutions, Chief Financial Officers, Global Business & Spending Monitor, CFO Research

UK finance directors less optimistic than US on growth

Matthew Garrow-Fisher | News | 18 May 2012

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Finance directors based in the UK have shown modest optimism to economic growth prospects for the year ahead, leading many to seek cost cutting strategies, a new report has revealed.

The fifth annual Global Business & Spending Monitor from American Express and CFO Research, which surveyed 541 senior finance executives across the world in a variety of industries, showed that just 24% of British Chief Financial Officers (CFOs) anticipate economic expansion, compared to 78% of CFOs in the US.

Optimism is even higher in India, where 86% of finance directors predict that the economy will recover in the coming year.

However, few companies around the world plan to fund any new initiatives, the report found, with many CFOs saying they will take a cautious approach to spending and investment in 2012.

In the UK, more than half (53%) of respondents to the survey said their companies will have a tight control on spending and investment in order to preserve profitability.

Globally, the report revealed that 45% of companies will spend down some portion of their cash reserves in 2012, compared to 62% who said this last year.

Brendan Walsh, Senior Vice-President of Commercial Payment Solutions at American Express Services Europe, suggested that UK-based CFOs are "playing the long game".

"The focus is more about tightly controlled spending and investment in areas that will preserve profitability, with modest spending to support top-line growth," he commented.

"This cautious and reserved approach also shows that UK CFOs have their eyes firmly fixed on the future, they are protecting their businesses now so they can quickly benefit from any upturn in the economy."

One way in which finance executives could make significant savings is by moving to shared services functions. Consolidating services and adopting purchase to pay could boost profit margins and cut costs.