CFO Survey: Capitalizing on a brighter economic outlook

As the economic landscape slowly brightens, CFOs’ overall outlook has cautiously improved, especially compared with the last few years. As a result, many CFOs are planning to raise capital in the coming months. Meanwhile, the role of the CFO continues to expand, driven by the ever-growing complexity of today’s business environments. Here’s what CFOs who participated in our third annual survey are focusing on and planning for the next 12 months. 

You can explore the full survey results, and filter by region, sector, and stage, via Sōzō Pulse.

CFOs’ optimism about the economy has continued to inch upwards, as 52% of respondents told us they are more optimistic about the economy than they were a year ago. The results are a solid improvement from 2023, when only 26% said they were more optimistic, and an outright reversal from 2022, when just 11% said so.

“I think we are turning a corner,” said Lee Kirkpatrick, who served as CFO of several technology companies, including Twilio, SAY Media, and Ofoto, and now advises venture-backed startups. The growing optimism is driven in part by improving economic indicators, he said. But also, after more than two years of economic turmoil, many companies have learned to do more with less. “They are operating more leanly than they did previously,” Kirkpatrick said, and that has increased their resilience and confidence about their ability to succeed.

The prevailing mood: Guarded optimism

Yet for many of the CFOs surveyed, that growing optimism remains tempered by caution.

“I feel more positive about the economy than I did 12 and 18 months ago,” said Paul Harrison, CFO of Norwegian robotics maker AutoStore. In the United Kingdom, where he is based, “we’ve done a decent job of getting inflation rates down, and I believe that will lead to rate cuts.” That will be positive for business sentiment and investment. “While I thought we’d be in a better place by now,” he said, “my eyes are firmly on 2025,  when lower rates should start to stimulate stronger economic activity.”

Also in the U.K., Steve Hulme, CFO of Zopa, a financial services company, shares Harrison’s cautious optimism. “We’re seeing the first signs of improving interest rates, and a bit more stability, which is helpful in terms of clarity about where we’re headed,” he said. But he too notes the flip side: gaps in public borrowing, government debt, and tax rises. “We’re watching it all very carefully,” he said. And while the signals look better for the future than they have over the past 18 months, “they’re still only signals at this point,” he added.

The upbeat mood was most pronounced in Asia and the Middle East, where 75% of CFOs said they are more optimistic than a year ago. In contrast, only 35% of CFOs in Latin America shared that sentiment.

One concern continuing to weigh on optimism is geopolitical tensions, with 24% of respondents saying they could have a major impact on their company, compared with 11% last year. That includes AutoStore, which is currently manufacturing in Thailand and Poland. “Aluminum is a significant raw material that goes into our robots,” Harrison said. “The price of aluminum moves in line with geopolitical factors. We’re not immune to disruption, but are doing all we can to protect the business from it,” said Harrison, “including doubling down on supply chain resilience.” Hulme also is “paying close attention to what’s going on in the external world,” he said, especially the factors that can impact Zopa’s business: inflation, central bank base rates, and the health of the job market.

Returning to the capital markets

Amid the improving economic conditions and easing pressures to prioritize profitability, many CFOs are returning to the capital markets: 50% said they plan to raise funds in the next 12 months. They are doing so despite a fundraising environment that remains challenging: 36% said it is easier to raise funds than a year ago, while 31% said it is harder.

Hulme’s experience underscores the mixed mood among investors. He is finding more investors are open to conversations about fundraising and growth, especially for profitable businesses like Zopa. “But it’s difficult to say whether it’s truly getting easier,” he said. “It’s at least not getting harder than last year, and hopefully the improving economic environment will give investors more confidence.”

Equity financing remains the preferred way to raise capital, with 29% of CFOs planning to choose that route, while 19% plan to use a mix of debt and equity. Just 3% plan to use debt alone. But while respondents are raising money, just 6% of CFOs said they plan to take their company public in the next year.

“We’ve been on the record talking about future IPO plans,” Hulme said. But before embarking on a journey toward an IPO, he added, “we need to see the U.K. market improve and valuations improve too.”

The role of the CFO has been steadily expanding for some time in response to increasingly complex business environments, with more demand for strategic decision-making and involvement in areas beyond traditional finance management. Today’s CFOs are driving growth and innovation alongside efficiency, and also helping shape company strategy — aligning financial goals with broader business objectives.

Overall, 63% of CFOs said they are spending more time on operations this year than two years ago, while 50% are spending more time on sales and go-to-market activities, and 40% more on talent and resource management. United States CFOs were the most likely to say they were spending more time on operations at 79%, followed by Latin America at 61%, Asia at 55%, and Europe at 47%.

“The CFO role has been changing for a while, and that change has accelerated in recent years,” Kirkpatrick said. In part, he said, many traditional CFO tasks, from budgeting and forecasting to building capital equity tables, have been automated by software. Additionally, playbooks with detailed metrics for sectors such as SaaS and marketplaces are readily available. All that is giving CFOs more time to focus on other tasks. But also, companies have come to recognize two things: The credibility and accuracy of CFOs’ forecasts to boards of directors and investors are dependent on a keen and close understanding of everything that’s going on inside the company; and that understanding is critical to allocating resources efficiently and unleashing untapped potential. “As CFO, you are going to live and die by what happens in sales, in operations, in product development,” Kirkpatrick said. “It’s what’s going to drive your success.”

Harrison, who first became a CFO in 1999, has lived through these changes. “The CFO’s role has broadened considerably,” he said. One of the biggest shifts has been the relationship between the CEO and CFO: “CEOs are now more readily using their CFOs as a sounding board across a range of decisions.”

A CEO partnership that can promote efficiency

Looking back, Harrison said that a few years ago, he doesn’t recall his CEO seeking his view on topics as diverse as the effectiveness of marketing collateral. Today, he’s asked to advise on that — and many other matters. “That’s the change,” he said, “and of course it varies by CEOs.”

Hulme noted that his role has gotten more complex — across several dimensions at once — as Zopa’s business has grown. “We recently did our first M&A transaction,” he said. “We’re doing some new capital markets transactions.” That has all meant “expanding the scope in various different directions all at once.”

Harrison is among the survey respondents who said they have spent more time on operations in the past two years. AutoStore recently identified a need to strengthen the finance function, and specifically, to bring in people with more experience. “I put a great deal of thought into what makes a successful person in this business,” he said, “including weighing the right combination of IQ and EQ that makes them land well and be successful.” That process — necessary for the business’ evolving needs — can be time-consuming, but the investment to land the right people is so important, he said.

Kirkpatrick said CFOs’ increasingly strategic role is a net plus for companies. “It has a huge potential to make companies more efficient and nimble,” he said. No executive, other than the CEO, has more visibility than the CFO into what is happening across the company, from sales to operations, product development, and human resources. And the more time they spend with customers, sales people, product people, and other employees, the more they are able to contribute. “If the CFO understands the business well, the fact that they have all this information across the organization sets them up to add a lot of value,” he added.