c2fo Outlook

The State of Working Capital

Discover how businesses are adapting to the higher cost of money and finding the funds they need to thrive.

Mixed News on Inflation

Conditions have improved, but businesses are still worried. Here’s why inflation is still the No. 1 threat.

Solving the Liquidity Problem

Nearly 60% of those surveyed would feel the impact if payments were delayed a month.

TABLE OF CONTENTS

What’s Inside

Most people expect economic growth, but some concerns still remain.

1. Methodology
2. Economic Outlook
3. Executive Summary
4. Inflation’s Impact
5. Solving the Liquidity Problem

METHODOLOGY

About the Survey

C2FO surveyed business leaders in four key markets in January 2024 to assess the state of working capital and its impact on businesses.

Total Number of Respondents

• 1,079 respondents from four regions:
  • Mexico: 220
  • United States: 429
  • United Kingdom: 216
  • India: 214

Roles

• 80% of survey respondents are executives.

Company Type

• 65% of survey respondents have been in business for over 10 years.

EXECUTIVE SUMMARY

Business Leaders Expect Growth in 2024, but Working Capital Could Be a Problem

Most respondents think their companies and economies will grow over the coming months, even with concerns about inflation and higher interest rates.

• 78% of respondents expect their businesses’ revenue to grow in 2024.
• 32% believe their businesses will grow by more than 10%.
• 88% of Indian respondents expect their businesses to grow, the highest among surveyed countries.

Working Capital and Liquidity Concerns Remain

• 59% said they would feel an impact if payment terms were extended by 30 days.
• 24% of suppliers don’t have access to enough liquidity to operate for a year.
• 42% of suppliers use dynamic discounting to access funding.

ECONOMIC OUTLOOK

Across Regions, Businesses Consistently Forecast Growth in 2024

Majorities expect their businesses to increase revenues over the coming months.

What people are saying

• “The economy is a roller coaster. Inflation, employee shortages and cost of living are out of control.”
• “The cost-of-living crisis has made people reluctant to spend.”
• “Inflation is getting better, and prices are coming down.”

Hiring Is Expected to Grow Slightly or Hold Steady

• 54% expect a positive impact from AI.

Inflation Remains the No. 1 Threat for Businesses

• 60% identified inflation as a threat for 2024.

67% Expect to Raise Prices, but Increases Should Be Relatively Mild

• 42% of respondents expect increases of 5% or less.
• 17% plan hikes of 6% to 10%.

INTEREST RATES

Interest Rates Are Another Big Question Mark for 2024

• Interest rates tied for sixth on potential concerns. They limit growth.

Higher Interest Rates Make It Harder for Businesses to Access Working Capital

Among respondents who were negatively impacted because they couldn’t access funding

• Blamed high interest rates as the most cited obstacle.

Slower Payments, Lack of Liquidity Pose Serious Threats to Businesses

• 59% would feel the impact if payment terms were extended by 30 days.
• 1 in 4 said they do not have enough cash flow to run their businesses for 12 months.

SOLVING THE LIQUIDITY PROBLEM

To Adapt, Many Companies Are Turning to Solutions Outside Traditional Lending

• Supply chain financing: Partners with banks to pay invoices ahead of schedule.
• Invoice factoring: Suppliers sell receivables to a factor.
• Dynamic discounting: Early payment in exchange for a discount.

THE BOTTOM LINE

How Smart Companies Can Thrive Over the Next 12 Months

• Embrace opportunities for growth.
• Have a plan for managing interest rates and other challenges.

Explore new, innovative solutions

• C2FO offers a modern platform for increased operational efficiency.