The CFO PlayBook for 2023

Print Bookmark

This is the bleak picture of how 2023 has started.

But there’s light at the end of the tunnel. And to reach there, one has to tread the daunting path, i.e., 2023. Two-thirds (68%) of the chief financial officers () believe that it is their responsibility (more than the CEOs’) to steer their business through these tough times.

In this playbook for CFOs, we provide quarter-wise forecasts of market conditions along with actions finance leaders can take to survive and thrive.

What's Inside?

  • Cost optimization is a priority, but should be accomplished in creative ways
  • Working capital management and accounts receivable collection is critical to surviving 2023
  • Automation is a continuous effort that CFOs cannot afford to halt, irrespective of the economic environment

Chapter 1


Chapter 2

A Good Start Is Half the Race Won

Chapter 3

Keep a Steady Pace as the Tracks Become Slippery

Chapter 4

The Second Half of the Race is Easier Than the First

Chapter 5

Finish the Race in Style

Chapter 6

Plan Ahead But Pivot Where Necessary
Print Bookmark
Chapter 01


2023: A Look At The Macroeconomic Conditions

2023 is a trickier turf compared to its predecessor 2022, and winning on it will require a totally different game plan.

In 2022, 65% of CFOs we surveyed were confident of achieving 20%+ revenue growth. But only 8% expect to achieve similar revenue gains in 2023.

A recession, persistent inflation, higher cost of capital, geopolitical risks, currency fluctuations, and lingering risks of COVID-19 will shape the 2023 business environment. The war for quality talent, increased cyberattacks, and lower funding are other trends that’ll dominate 2023.

Chief financial officers play a key role in steering their business in such tough times. In fact, 68% of CFOs believe it is their responsibility (more than the CEOs) to steer their business through a recession.

In this playbook, we try to envision what each quarter of 2023 will be like as well as discuss actions that CFOs can take during these periods.

Macro conditions during each leg of the race CFO focus areas
Q1 2023

High inflation and high-interest rates, COVID-19 uncertainties, lay-offs

Budgeting, tech & financial planning, team restructuring, hiring plans, cash forecasting, annual report presentations & investor relations management
Q2 2023

Recession, continued inflation and high-interest rates, bad debt rise

Cost optimization, receivables management, payment collections
Q3 2023

Improved business confidence and optimism, green shoots of recovery

Re-evaluate digital transformation projects, identify M&A opportunities, hiring reassessments, competitor evaluation
Q4 2023

More positive economic environment, interest rate cuts, cooling cost pressures

Review financial progress, auditing and filing compliance docs, set fresh goals, forecasting, and budgeting for the coming year
Chapter 02

A Good Start Is Half the Race Won

Kick-off 2023 by evaluating priorities and plans in Q1

External environment

Q1 (Jan – March), the first quarter, will continue to witness the sluggish growth and uncertainties that were prevalent in the second half of 2022. The borrowing rate will remain high, making holding cash and managing working capital critical.

In 2022, we surveyed 150+ finance leaders and found cost optimization to be one of their key priorities. We expect this to continue well into 2023 as inflation and interest rates remain high. Supply chain pressures and high commodity prices due to geo-political tensions further affect business growth.

Here are some strategies CFOs can adopt in Q1 to steer their businesses through the quarter and the rest of the year.

Tips to Ace the Race

  1. Revisit finance plans, budgets, and strategies
  2. Use the start of the year to confirm your financial plans, budgets, and strategies. 2023 is a year where businesses will be cash-strapped, so Gartner advises creating a prioritized list of trade-offs you’ll make in your budget. 

    Key factors to consider include:

    1. Do not cut tech/automation budgets: Spending on digital transformation (DX) initiatives isn’t going to slow down, according to 70% of CFOs. Hence, ensuring you get maximum returns from DX investments is crucial. Plan to move legacy systems to cloud/SaaS options to save upfront costs. Secure the best terms and prices through skillful negotiation when buying software/IT services.
    2. Keep an eye on hiring spend: 47% of CFOs continue to find it difficult to hire and retain talent, with compensation at an all-time high. While many firms are opting for a hiring freeze, this might lead to your competitors securing great talent at a discount. You’ll need to secure good talent by clarifying your value proposition and removing hiring constraints (e.g. location, type of contract).
    3. Relook pricing strategy: Given inflation and input price rises (66% of CFOs in our 2022 survey mentioned this as a key challenge), you may need to re-evaluate your product/service pricing to remain competitive without losing margins and market share. 
    4. Review contracts and sourcing strategies: Several contracts renew at the beginning of the year. Evaluating the contracts and bargaining for better deals can help. Also, check if some workflows could be more efficient and cost-effective when outsourced. Accordingly, evaluate partners for the same.

  3. Restructure teams to balance costs and improve output
  4. Reorganizing the teams is an effective way to maximize performance and resolve issues such as talent underutilization and quiet quitting. 

    Based on the size of your organization, you may want to merge teams or shift resources to critical areas. For example, if you have trouble reaching out to customers for payments, you might want more hands on the collections team.

    Check out our finance team structure guide for more tips on reorganization.

  5. Forecast cash flow accurately to ace operations 
  6. Continuous cash forecasting using reliable tools is key for liquidity management and to free cash for emergency needs. Cash forecasting also gives you visibility into your working capital and financing costs in an uncertain economic environment with high-interest rates.

    “I think it’s important to forecast cash flows by estimated revenue by product, by customer, by currency, and by breaking down operating costs between fixed and variable and other categories. If there are certain variables, like key input prices that could fluctuate dramatically, having a proper sensitivity analysis can help.” – Dr. Howard Johnson, Managing Director at Duff & Phelps


    Not to forget: Present accurate investor reports on time!

    Q1 is also the time to complete and present the financial numbers of the previous year. Ensure your accounts are audited and the year-end close and annual report preparations are smooth.

    Check out our Autonomous Accounting solution for a faster financial close!

To summarize:

  • Q1 will continue to experience the economic pressures from the second half of 2022 – high inflation and interest rates, job cuts, supply chain constraints
  • Review your budgets, cash flow forecasts, and organization structure to ensure strong financial muscle and endurance.
  • Present your previous year’s financial reports on time.
Chapter 03

Keep a Steady Pace as the Tracks Become Slippery

Navigate the volatile Q2 And shaky markets by optimizing costs

External environment

Various reports suggest Q2 (April–June) 2023 will be the most challenging quarter of the year. Fannie Mae expects housing sales to bottom out in Q2, while Fitch predicts the recession to start in Q2.

The Fed is expected to keep rates high while inflation continues to be a worry, though it will be on a downward trend.

Here are some activities CFOs will focus on in Q2.

Tips to ace the race

  1. Focus on cost optimization initiatives
  2. The pressure to manage costs will continue throughout 2023. With calls to continue digital investments, CFOs will need to creatively look at cost optimization opportunities outside of the IT budget.

    “The companies I’m talking to are all focused on cost reductions. “Whether it’s through headcount or other means, that’s what they’re focused on.” – Sean Denham, Audit Growth Leader at Grant Thornton 

    Reducing travel expenses and third-party consulting fees, finding cheaper sources of capital, and using newer payment methods/channels can also support cost optimization initiatives.


  3. Collect receivables to avoid working capital pressures
  4. As economic conditions continue to deteriorate, their impact will be felt on your accounts receivable as well. To ensure your credit sales don’t turn into bad debt, you should prioritize collection efforts.

    Ensure your team touches base with customers well ahead of the payment due date to confirm receipt of invoices and payment schedule. Where needed, offer to restructure payment methods (part payments, discounts, etc.) to ensure aging receivables don’t turn into bad debt and revenue loss.

    Some of the metrics you’d want to keep a watch on include the cost of receivables collection, bad debt, aging buckets, etc.


To summarize:

  • Q2 is widely expected to be the most challenging quarter of 2023
  • Business leaders should focus on cost optimization and robust working capital management to maintain their pace of operations.
Chapter 04

The Second Half of the Race is Easier Than the First

Re-energize yourself with the green shoots of recovery visible in Q3 2023

External environment

As the year progresses into its second half, the level of optimism also rises. The number of investors who believe the Fed will start cutting interest rates in Q3 is 13%, compared to 2.5% for the first half of the year. It jumps to 36.4% for those who believe the rate cuts will begin in Q4.

Overall, in Q3, while businesses will continue experiencing challenges, it is the best time to rev up your engine and prepare for take-off (bigger opportunities), the signals for which will likely come in the next six months.

Here are some things to check in Q3 to prepare for takeoff.

Tips to ace the race

  1. Watch out for M&A opportunities
  2. While mergers and acquisitions (M&A) slowed down substantially in 2022, they are expected to pick pace in the latter half of 2023. If you are planning to put your business up for acquisition, begin the valuation process and scout potential buyers. 

    If you are looking for good deals to buy businesses/business units, this is again the right time as business confidence levels are beginning to strengthen and valuations haven’t skyrocketed to pre-pandemic levels.

    | 72% of tech CEO respondents plan to pursue M&A in 2023 (EY)

    | Energy, healthcare, and fintech will witness higher M&A (Source)

  3. Keep treading the digital roadmap
  4. Over the past few years and into the future, CFOs will need to fully embrace technology to achieve their goals and keep pace with the competition. The beginning of the second half of the year is a good time to once again re-evaluate tech priorities, the ROI from recent tech investments, and plan for future digital needs and emerging trends.

    Based on the performance in the last few quarters and anticipated future needs, you could also look at hiking your tech budgets, as needed.

  5. Track competitors and their moves
  6. While survival was the motto for the first half of 2023, preparing for thriving would be the key focus in the second half. Analyze and track your peers and those of successful enterprises to check the steps they are taking to prepare for takeoff.

    Study the investments they are making, the kind of balance sheet and assets they have, and their margins. Compare your position vis-a-vis theirs and discuss with the board and leadership whether there are actions (new product launches, market expansion, etc.) that you’d like to take in the next six months to one year. If so, start preparations for them right away.

To summarize:

  • The external elements start becoming less harsh in the second half of 2023.
  • CFOs should boost the firm’s energy to prepare for accelerated growth via M&A opportunities and automation efforts.
Chapter 05

Finish the Race in Style

Finish the year in style And prepare for 2024

External environment

While 2023 might have begun as a tough year, it is expected to end on a positive note. 

More investors expect the Fed to cut interest rates in Q4 2023, signaling a cooling of inflation rates. M&A is also expected to gather pace, and more companies may begin preparations for an initial public offering (IPO).

CFOs, in the final quarter of the year, also need to prepare and review their balance sheets while planning fresh strategies and roadmaps for 2024.

Here are some to-dos for CFOs in Q4 to end the year on a positive note and look ahead to the following year.

Tips to ace the race

  1. Review earnings & spend, complete audits and compliance reports, and prepare for year-end close
  2. As the financial year draws to a close, you’ll need to gather the numbers and data for the year while starting to plan for the next one (2024). Financial data management software tools can help you avoid last-minute hiccups and errors.

    Ensure that you also incorporate ESG (environment, social, and governance) data and other necessary details around cybersecurity, spend distribution, etc. Also, file the necessary compliance documents with the concerned regulatory bodies before the due dates.

  3. It’s again time for fresh goal-setting!
  4. Once you’ve reviewed the year’s performance and understood your strengths, weaknesses, opportunities, and threats (SWOT), it’s time to plan for the next big race in 2024.

    Some plans of 2023 may spill over into 2024, while in some cases you may need to course-correct and start afresh. Whatever the case, Q4 is the right time to start planning for the next year. Prepare budgets, forecasts, and funding requirements to plan sales and operations for the next year.

To summarize:

  • Q4, the last leg of the 2023 race, is comparatively easier than the earlier stretches.
  • Finance leaders should start preparations for 2024 while reviewing the performance and financial numbers for 2023.
Chapter 06

Plan Ahead But Pivot Where Necessary

Looking at the future through a crystal ball is challenging. There are chances of events that no one anticipated (like COVID-19!). Hence, being ready to pivot as needed to address market challenges is critical.

But over the years, what we’ve seen is that adoption of automation technologies has remained crucial. CFOs have over the years shed their inhibitions about IT and today whole-heartedly, embrace and advocate for digital initiatives. This will continue through 2023 and beyond.

Some other non-traditional areas that’ll need CFOs’ attention in 2023 and throughout the next few years include ESG, cybersecurity, and talent management. Change management is another aspect that CFOs will need to drive, especially as the finance team embarks on large-scale automation initiatives.


Most Popular Resources

All Topics
Autonomous Receivables
Talk To Our Experts

Streamline your order-to-cash operations with HighRadius!

Automate invoicing, collections, deduction, and credit risk management with our AI-powered AR suite and experience enhanced cash flow and lower DSO & bad debt

Talk to our experts
Thank you for downloading the PDF!