Authored by Asif Khan
Although it’s rather obvious that CFOs always have money on the mind, the CFO Survey 2013, published by 4C Associates, highlights that rising prices are a growing worry for procurement’s finance colleagues: 65 per cent of participants listed ‘price risk’ as their top concern – up more than 15 per cent since last year.
Most companies are still struggling to combat volatile commodity prices and rising inflation. Indirect costs are climbing on the operational side, too. Yet, customers have little-to-no sympathy about the plight of corporations because they face a similar battle: the skyrocketing cost of living with stagnant wages. The result: Companies that pass on cost increases to maintain profit margins risk alienating customers and losing critical sales.
The responsibility to improve margins and deliver more value to the business – and when done well, the glory that comes with it – has been somewhat of a tug of war between procurement and finance. By shifting the dynamics so both departments can become allies, rather than competitors, cost savings will improve, and the process will easier for both parties.
How is your organisation bridging the gap between the procurement team and the finance department?
Check back for the next post on this topic to read about the other risks that worry CFOs.