# Can CFOs balance the books with rising operating costs? Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-07-06 Category: BUSINESS Category URL: https://financedigest.com/category/business Meta Title: Balancing Rising Operating Costs as a CFO Meta Description: Discover how CFOs can navigate rising operating costs amidst challenging economic forecasts, from managing inflation to increasing interest rates and URL: https://financedigest.com/can-cfos-balance-the-books-with-rising-operating-costshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/istock-1359853031-1736815599407-compressed.jpg) _By **Mark Blakemore,** Chief Finance Officer at_ [_Compleat Software_](https://www.compleatsoftware.com/) _, the purchase to pay (P2P) software house_ As almost every single finance leader (98%) surveyed by Deloitte recently said they anticipated operating costs to rise this year, how can they balance the books in the face of some of the most challenging economic forecasts in recent history? Almost half (46%) of the CFOs surveyed also said they expect these rises to be significant, while 71% believe operating margins will fall over the next 12 months. High inflation and interest rates have overtaken concerns over brexit and the pandemic, putting the pressure on businesses to operate with fine margins. The spotlight is on CFOs to balance growing operating costs while maintaining growth, but can it be done? **Is there an endgame?** With no exception, the day-to-day expenses associated with the maintenance and administration of a [business are rising](https://www.financedigest.com/pizza-firm-dp-eurasia-delivers-profit-rise-evaluating-russian-business.html "Pizza firm DP Eurasia delivers profit rise, evaluating Russian business"). From the cost of energy, to raw materials, labour shortages and [rising interest rates](https://www.financedigest.com/oil-falls-as-earthquake-impact-on-crude-eases-rate-hike-fears-rise.html "Oil falls as earthquake impact on crude eases, rate hike fears rise"). Ultimately if businesses do not find solutions to [deal with rising](https://www.financedigest.com/u-s-mid-tier-lenders-shares-rise-in-frankfurt-after-svb-deal.html "U.S. mid-tier lenders shares rise in Frankfurt after SVB deal") operating costs, businesses will fail, further compounding the issues faced. In this era of predictable unpredictability, [CFOs face an unenviable challenge that needs](https://www.financedigest.com/cfos-need-a-focus-on-forex-in-financial-planning-tools-accountagility-reveals.html "CFOs need a focus on forex in financial planning tools, Accountagility reveals") to be met, with both optimism and practicality – it is a good job that CFOs have broad shoulders! Given the global, interconnected and data-driven [way in which businesses](https://www.financedigest.com/5-simple-ways-in-which-your-business-can-save-water.html "5 simple ways in which your business can save water") operate, the pace of change is often rapid and long lasting, due to the relationship between the key factors impacting a business’s bottom line. The hangover of [Brexit and the pandemic have blended with rising geopolitical risks](https://www.financedigest.com/brexit-the-risks-to-the-city-and-fintech-have-never-been-greater.html "BREXIT: THE RISKS TO THE CITY AND FINTECH HAVE NEVER BEEN GREATER") associated with the war in Ukraine, set alongside record inflation, globally – all are driving costs up for businesses. Even if [businesses provide and sell](https://www.financedigest.com/reasons-why-you-should-hire-a-business-broker-to-sell-your-business.html "Reasons Why You Should Hire a Business Broker to Sell Your Business") more services, they’re not making the margins they once did, which will see constant knocking on the finance door to provide answers to this significant challenge! **Donning the battle armour** CFOs are answering the door and [facing the challenge](https://www.financedigest.com/under-saved-and-underprepared-women-face-challenges-saving-for-retirement.html "UNDER-SAVED AND UNDERPREPARED: WOMEN FACE CHALLENGES SAVING FOR RETIREMENT") head on. But what approach should they take? Tighten purse strings, [reduce energy](https://www.financedigest.com/britains-ofgem-to-urge-public-to-reduce-energy-usage-ft.html "Britain’s Ofgem to urge public to reduce energy usage – FT") consumption, remove the dead wood, invest in better practices – all of the above? It is not quite as simple as that. [CFOs are in a unique position to balance](https://www.financedigest.com/managing-corporate-currency-risk-the-cfos-balancing-act.html "Managing Corporate Currency Risk: The CFO’s Balancing Act") the books in the face of rising operating costs, as the scope of their roles allows them to impact upon all aspects of a business, from steering strategy around technology investments, to ensuring supply chain resilience, as well as influencing talent management and even organisational culture. CFOs should not be scrambling to batten down the hatches and adopt simple cost cutting measures that they may have undertaken during the pandemic, such as reducing workforces, stopping bonuses and [increasing prices](https://www.financedigest.com/taylor-wimpey-espana-remain-cautiously-optimistic-as-average-selling-price-increases-by-20-4.html "Taylor Wimpey España ‘remain cautiously optimistic’ as average selling price increases by 20.4%") and expect this to ride out. There are simply too many factors involved, which are intertwined. CFOs are [presented with a great opportunity](https://www.financedigest.com/the-rise-of-finfluencers-presents-unique-opportunities-but-brands-must-proceed-with-caution.html "The rise of “Finfluencers” presents unique opportunities but brands must proceed with caution") to introduce much needed innovation into their businesses. This could take the form of [creating new products](https://www.financedigest.com/4-tips-for-creating-a-calm-workspace-to-boost-productivity.html "4 tips for creating a calm workspace to boost productivity"), or services, entering new markets, as well as looking to invest in technology to innovate and automate processes. **Unleash innovation by leveraging [intelligent automation](https://www.financedigest.com/why-intelligent-automation-should-be-a-top-priority-for-enterprises-in-2022.html "Why Intelligent Automation should be a top priority for enterprises in 2022")** In these times of narrow margins and [increasing costs for pretty much every business](https://www.financedigest.com/how-increased-environmental-and-ethical-reporting-impact-businesses-and-their-cfos.html "How increased environmental and ethical reporting impact businesses and their CFO’s") commodity, organisations are increasingly turning to their CFOs for strategic direction and to drive business transformation. The role of finance professionals has altered dramatically over recent years due to emerging and proven technologies, such as intelligent automation, AI and machine learning – all of which help [CFOs to streamline processes](https://www.financedigest.com/can-digital-labour-displace-cfos-in-the-close-process.html "CAN ‘DIGITAL LABOUR’ DISPLACE CFOS IN THE CLOSE PROCESS?"), improve accuracy and maximise compliance – in short, CFOs can assist businesses to accomplish more with less by, investing in true automation. Many financial operations can, and are fully automated, using currently [available technologies](https://www.financedigest.com/advertys-multi-patented-and-industry-leading-in-game-viewability-technology-brainimpression-now-available-within-oracle-moat.html "Adverty’s Multi-patented and Industry-leading In-game Viewability Technology BrainImpression™ Now Available Within Oracle Moat"). [CFOs which embrace emerging technologies to automate](https://www.financedigest.com/10-ways-automation-has-changed-the-role-of-the-cfo.html "10 ways automation has changed the role of the CFO") finance operations can free up significant resources within their organisations, in areas such as cash flow forecasting, invoice processing, accounts receivable – freeing up resources to add value in other areas of the business, as well as accessing vital business data gained from automation to help drive business decisions. By ensuring that a business spends less time dealing with manual, time consuming tasks, [CFOs can pave the way for the business](https://www.financedigest.com/5-ways-cfo-and-cio-collaboration-can-benefit-the-business.html "5 Ways CFO and CIO collaboration can benefit the business") to implement strategies to support their employees in reinvesting their energy into work that requires more creativity and critical thinking. Adopting intelligent [automation and emerging technology now allows forward-thinking finance](https://www.financedigest.com/enterprise-automation-is-the-future-of-finance.html "Enterprise automation is the future of finance") leaders to remain competitive amidst today’s complex challenges. CFOs have many solutions at their disposal to help balance the books in the [face of rising operating costs](https://www.financedigest.com/estonias-pro-kyiv-government-faces-election-test-amid-cost-of-living-crisis.html "Estonia’s pro-Kyiv government faces election test amid cost of living crisis"). By taking a holistic approach to the problem and fully embracing the benefits of automation, CFOs are able to free up significant [resources in their organisations to focus on strategic](https://www.financedigest.com/the-importance-of-strategic-human-resource-management.html "The Importance of Strategic Human Resource Management") leadership and innovation, helping them to balance the books in the face of rising operational costs. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---