THREE-IN-TEN UAE CFOs CONCERNED ABOUT AVAILABLE CASH FLOW WITHIN THEIR BUSINESS.
- Managing the balance sheets (29%) and access to investment financing (29%) are also primary concerns
- Nearly half (45%) cite customer/client insolvencies as the main reason for cash flow problems
Cash flow remains a significant concern for a large number of UAE CFOs, according to new research from leading recruitment specialist Robert Half UAE. Nearly three-in-ten (29%) CFOs in Abu Dhabi and Dubai said cash flow was one of the biggest internal concerns they currently face in their roles. This was tied with managing the balance sheets and access to investment financing, both also at 29 percent.
When asked which three factors contributed to their concerns around cash flow, nearly half (45%) of CFOs cited customer/client insolvencies as the main reason. Following closely behind, more than four-in-ten (41%) blame competitive pricing/low margins, slow paying customers, higher business expenditures and lower revenue, respectively.
James Sayer; “Cash flow clearly remains a priority for finance leaders, particularly small and medium-sized enterprises (SMEs) who rely heavily on liquid capital to keep business running as usual. With SMEs contributing to the UAE’s fiscal growth, job creation and economic well-being, it is essential for these organisations to be supported to keep the economy on track.” — James Sayer, Director, Robert Half UAE
75 Dubai and Abu Dhabi-based CFOs were asked; ‘What three factors have contributed towards your concerns around cash flow?’
|Customer / client insolvencies||45%|
|Competitive pricing / low margins||41%|
|Slow paying customers||41%|
|Higher business expenditures||41%|
|Difficulty securing financing||32%|
|Higher cost of short-term financing||23%|
|R&D / new product development||9%|
|Rapid growth/new investment opportunities||5%|
While nearly one in three (32%) finance leaders are concerned over access to investment financing as a contributing factor to their cash flow concerns, and a further one in four (23%) citing the higher cost of short-term financing, CFO’s offer their insights on the factors making it difficult for companies to secure credit and finance. At that top of this list is perceived exposure to bad debt and risk (33%) as the chief barrier to securing financing. This is followed by a poor credit rating (29%) and operating in a perceived risky or depressed industry (27%).
James Sayer; “Access to financing has prompted cash flow concerns for one in three businesses which may be exacerbated if financial institutions fail to provide the necessary funds to the SME market. Companies need to ensure they have the right talent in place to provide prudent financial management, making their businesses as attractive as possible for lending institutions.”