CFOs in small businesses confident about the year ahead, survey reveals

More chief financial officers in small and medium businesses are confident about the year ahead, with 63% preparing for growth, according to a survey released this week.

The inaugural survey conducted by William Buck accountancy firm surveyed 100 CFOs from SMEs in Australia. It found only 5% are preparing for their companies to remain “steady” in the year.

The findings are in contrast to the overall gloomy atmosphere in the small business community, especially as business confidence barometers suggest SME owners are trailing behind an already low consumer confidence reading.

“Anecdotally our experience has been that most clients have been tightening the purse strings quite a bit,” William Buck corporate advisory head Manda Trautwein told SmartCompany this morning.

“Businesses have been trying to survive and just deal with current conditions. But we’re seeing now most companies are gearing up for what is expected to be a reasonably aggressive growth period.

“This was somewhat surprising.”

Trautwein points to the finding which shows 72% of CFOs expect to substantially increase marketing investment in the next 12 months. This is usually an indication companies are confident that marketing will lead to lucrative returns.

The survey isn’t all good news. 35% of companies said they were performing below their forecasts for revenue, and 40% said they were below forecasts for profits.

And while 60% of businesses said they were able to obtain funding from banks, 14% said it was difficult and 8% said this was “very difficult”. Only 8% said it was “very easy”.

Trautwein says the performance against revenue and profit forecasts suggests businesses are still going through some tough times.

“This may suggest that in order to get closer to their revenue budgets, they’ve had to sacrifice on margins,” she says.

“This also just shows that trading conditions are still difficult for many businesses.”

The survey found CFOs spend 59% more time on statutory compliance than they would like, but 70% said this was only a “minor” problem, or not even a problem at all.

“This appears to indicate that in spite of the government’s best efforts to simplify the compliance burden on mid-market businesses, it remains onerous and time consuming,” the report stated.

CFOs greatest challenges were preparing meaningful forecasts, access to timely information and stakeholder management.

While the report suggests CFOs are more confident among SMEs, Trautwein says the figures show trading conditions remain “tough”.

“There’s still plenty of competition out there.”