Indian CFOs plan increased spend in 2019: American Express survey

Senior finance executives remain optimistic about the economy, the outlook for their companies and their investments for the future, according to the 2019 Global Business & Spending Outlook, a survey released by American Express and Institutional Investor Thought Leadership Studio.

This optimism can be seen in their spending outlook with 83 percent chief financial officers (CFOs) looking at moderate to aggressive increase in spending and investment this year to support topline growth. A third (33 percent) of the CFOs surveyed expect their company’s spending and investment worldwide to change by 10 percent or more this year.

Nine out of ten (90 percent) of Indian CFOs believe that improving cash and working-capital management will be more important this year as compared to last.

According to the survey, 67 percent Indian CFOs expect improved use of credit to yield a substantial financial benefit, while 57 percent of Indian CFOs are likely to increase their investments in improving administrative process efficiency this year.

The focus on efficiently managing bottom-line spending is evident in the increase from 40 percent voting this as an investment priority last year. Nearly all (96 percent) of CFOs plan to spend more or the same amount this year on financial reporting and compliance services.

Travel and entertainment (T&E) continues to be a sizeable part of companies’ spending, with 77 percent Indian finance executives planning to increase their spend or invest the same amount on T&E this year.

“Indian firms are gearing up to efficiently manage their spending and investment this year with a keen eye on the future,” said Manoj Adlakha, CEO – American Express India. “While they balance spending to drive top-line growth with profitability, they’re pressing ahead with plans to take advantage of demographic and economic changes to stay relevant and competitive in the next 5-10 years."

Indian companies continue to grow; 87 percent of companies surveyed in India report higher or much higher revenue in the last 12 months, as compared to 43 percent last year. This number is notably higher than the worldwide (65 percent) and Asia average (63 percent) for this year.

Indian CFOs continue having a positive outlook towards global trade policy, with 63 percent of Indian CFOs expecting global trade policy to strengthen their company's growth prospects.

“I feel CFOs today play a critical role in the long-term strategic planning and health of the company. In fact, one of the findings in the survey is that 73 percent of Indian CFOs collaborate most closely with the board of directors. This is testimony to the increasingly important and strategic role CFOs play, as they navigate organizational spending in line with economic drivers and influences,” said Adlakha.

The 2019 Global Business & Spending Outlook was conducted by Institutional Investor Thought Leadership Studio (IITLS) and is based on a survey of 901 senior finance executives from companies around the world with annual revenues of USD500 million or more.

In total, 180 CFOs and other senior finance executives from Asia and 30 from companies in India participated in the study.  All survey responses were gathered in late November and December 2018.