How FDs must develop flexible budgets to adapt and survive in fast moving market conditions

Today’s markets are volatile in the extreme; whether it’s domestic economic policy, global conflict or rising energy costs driving change, markets rise and fall with alarming speed.

Certainty, the cornerstone of business success, is most lacking and planning and budgeting on an annual basis seems almost laughable in attempting to manage a business in 2023. Gartners report “Digital Future of Finance” cites that planning and budgeting activities, historically conducted on an annual basis, are simply not fit for today’s dynamic environment.

How to develop budgets that are fit for business success in 2023

The key elements to introduce in budgeting include:

  • Business priorities
    • calibrate these first in the light of new scenario
  • Model and adapt budgets to support these scenarios
  • Allocate resources accordingly
  • Apply for funding accordingly

Ensuring all the costs and benefits of changing priorities are captured is paramount to avoid nasty surprises.

CFOs and FDs of mid-market businesses must be able to adapt to the new scenarios by having the critical modelling skills to capture all the risks

The Founders and CEOs of mid-market businesses must be able to rely on strong data to reinforce their entrepreneurial view.

In order to facilitate this the CFO or Finance Director must both have a strong understanding of the current operations of the business and the ability to understand and model fresh initiatives.

Questions to be answered

“Do we really understand the costs and risks of our new priorities?”

“How do we adapt our current processes to best meet customer demand?”

“What reallocation of resources are required to ensure we don’t run out of cash doing this?”

 ‘The 5D FD’ White Paper’ underpins the importance of ensuring the FD or CFO has the right range of skills to undertake these crucial tasks. To learn more about ‘The 5D FD’ and how Acuity Associates uses The Acuity Measure to ensure the right skills are present in the CFO email and request a  call back.

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