“More than eight in 10 CFOs believe their company’s revenue will grow this year. Two-thirds of them anticipate growth of 10% or less. A few anticipate growth greater than 20%,” said the CFO Q2 2023 Outlook Survey, conducted by Wakefield and sponsored by Oracle NetSuite.

The survey, which was conducted between March 17 and March 30, 2023, and polled 500 US-based business leaders, mostly in finance roles, was intended to ascertain how they interpret and respond to Q2 2023’s economic trends and beyond.

Despite the prevailing economic uncertainty in the US, the survey respondents appear more confident about the economy, with most finance chiefs expecting inflation to have a positive effect on their Q2 2023 revenues.

Besides having a positive outlook on revenue, organizations are keeping up with technology. With companies investing in various types of digital technology, and finance leaders continually reevaluating the mix of technologies deployed, 93% of executives state that their companies are “Well-equipped to identify and address the evolving digital skills needed in finance”, as per the 2023 Q2 Outlook Survey report.

Some of the key findings of the survey include the following:

Savvy CFOs to accelerate M&A activity

The Institute for Mergers, Acquisitions & Alliances estimates that since 2000, more than 790,000 mergers and acquisition (M&A) transactions have occurred globally with a known value of over $US57 trillion.

In 2022, the deals that closed had a combined value of $2.7 trillion, as reported by GlobalData. What will the remainder of 2023 look like for dealmaking for US companies?

Despite the decline in M&A activity last year, companies are looking to grow through strategic acquisitions, and most are likely to pursue small to midsize deals given that “Smaller to midsize deals will be easier than megadeals to complete given relatively lower risk, less reliance on financing, and less regulatory scrutiny”, said management consulting firm Bain & Company, which has identified continued prevalence of small to midsize deals as one of the five M&A themes to keep an eye on in 2023.

Source: CFO 2023 Q2 Outlook

In 2023, savvy finance leaders will accelerate M&A activity to take advantage of opportunities to reshape their sectors, with almost two out of three CFOs making the bold move to acquire or consider acquiring another organization, the CFO Q2 2023 Outlook Survey noted.

CFOs feel the pressures of ESG adherence

Integrating environmental, social and governance (ESG) factors into every level of organizational strategy is increasingly important in 2023.

As disclosure practices are evolving, investors are increasingly seeking greater transparency in ESG-related matters and exhibiting a higher inclination to invest in companies that are harnessing the power of transparency to commit to ESG initiatives. Moreover, global regulators are collaborating to tackle ESG-related concerns.

“Perhaps these changes are why almost all executives report experiencing pressure to prioritize ESG. Nearly four in 10 strongly agree with that sentiment”, the survey explained.

Source: CFO 2023 Q2 Outlook

The increasing pressure from investors and the broader community to prioritise optimal ESG practices and to use it as a cudgel to force companies to incorporate ESG initiatives quickly, while they have their hands full, may result in “Drawing productivity away from their organizations’ limited resources”, as reported in a recent article in CFO.com.

Rather, the article recommends that “Leaders who wish to keep sales and potential customers’ thoughts on the brand both high and sustainable should consider their ESG approach with their customers at the forefront.”

To do so, the article advocates that “Leaders should provide spaces for open discussions about these topics, with a focus on hearing all ideas without consequences to the stakeholder bringing them. Instead of expecting employees to conform to someone else’s ideas of what ESG is, leaders may be better served by gauging their own people on what they believe the company’s ESG role is and how best they can do their part.” 

To conclude, the survey reveals key factors that will likely influence business goals in the second quarter of 2023 and beyond, including cost cutting as a path to increasing profit margins, monitoring the US Federal Reserve’s moves and other signs of recession, the continued adoption of artificial intelligence (AI), as well as “Managers’ dissatisfaction over their lack of freedom to innovate.” Despite the challenges and concerns, the good news is that CFOs expect growth in revenue and profitability in 2023.