AS businesses have sought to ride out the financial and economic crisis – and despite recent market turmoil – business confidence and growth aspirations are returning.
While this is welcome news, steering the right course through this stage of the cycle can be as difficult as managing a business through a downturn.
Many businesses in Yorkshire are targeting the expanding emerging markets, but a shift in strategic focus can have an impact on the way companies fund their businesses and manage their finances.
The most effective finance and treasury teams are developing the forward-looking analysis and insight needed to strike the right balance between curbing finance costs, ensuring effective risk management and maintaining the flexibility to capitalise on opportunities.
Effective liquidity management is going to be critically important.
In our report, Forward Thinking Finance: The Growth Challenge, developed in partnership with PwC, we examined how mid-market firms across the major EU economies are adapting to the particular demands they face.
The report indicates that there is an estimated 120bn euros that firms could release for investment without unduly stretching their balance sheets.
If accessed, this pot could provide a significant boost to economic growth in leading EU economies over the next few years.
Each business has different characteristics and demands and it is clear that the marketplace has changed.
Boards and executive management are looking towards finance to judge where to direct investment and to ensure that the risks are understood and controlled.
We believe that success will come down to how well chief financial officers and treasurers address four pressing demands:
l Reviewing the financing strategy’s alignment with the wider corporate strategy
l Assessing existing funding arrangements against the ability to meet business such as acquisitions and new market entry
l Putting in place the processes and support needed to provide the most effective insight, control and efficiency
l Underpinning this with evaluation of the finance function’s effectiveness to drive continuous improvement
Funding available to aid business growth and the present economic and market conditions offer a unique opportunity to firms to refinance, restructure and reorganise their business to gain a competitive advantage.
Smart firms will capitalise on this opportunity to drive growth, leaving their competitors trailing in their wake.