Year-end close processes are often a reflection of the year, and with a tumultuous one like 2023, many CFOs and controllers are looking to pay extra attention as they go into 2024. There are a variety of factors impacting accounts payable and receivables, including interest rates, inflation, liquidity, and float, but there are ways to manage the stress.
Principal Eric Scaringe said the liquidity issue is why he is forecasting greater levels of unpaid debt going into 2024. With interest rates high and capital short, financial professionals will be looking for capital they can leverage to offset their costs. “I think CFOs will take a closer look at the types of customers and business sectors they work in to determine if they can collect on debts. There will likely be more scrutiny on getting that [paid] sooner rather than later,” he said.
As important as identifying these debts can be, it’s just as important to identify future opportunities and challenges. Scaringe said that CFOs and controllers should keep one eye on next year as they go through the process of closing out this year. “Take a deep look at the horizon and see how many of these items currently or potentially will impact the business: the current geopolitical landscape, supply chain changes and inflation,” he said.
Read the full article published by CFO Dive.
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