Finance Leaders Face Major Budget Cuts in 2014 Due to Eurozone Challenges

Eurozone challenges and rising business demands are forcing finance teams to streamline operations, according to a new study.

A survey, which was commissioned by the CEB, and questioned 70 senior finance executives, found four in 10 finance departments across the globe expect to see their budgets cut in 2014, faced with rising investor demands on margins and the uncertainties of a two-track recovery in Europe.

But despite lower budget predictions, more than 70% of finance leaders say they are being asked to expand their role and do more to support other parts of the business.

CEB said this could involve introducing financial data analysis, identifying acquisition targets or rolling out new internal control frameworks in growth markets.

The research revealed, for instance, that more than eight in ten (81%) of companies have undertaken one of these "transformation" projects in the last year.

"Chief financial officers have realised that now, more than ever, different parts of the business need fundamentally different levels of support from their finance departments," Paul Dennis, senior director at CEB, told IBTimes UK.

He added: "The 'two-track' recovery in Europe, powered mainly by the UK and Germany, means that some core markets are in need of investment for growth whereas other markets, including much of southern Europe, continue to suffer from the impact of austerity and a shortfall of credit."

In addition, the study found that nine in 10 finance leaders are trying to support every internal business request, including many that have negligible impact on the overall business, or are outside the remit of the finance function.

With most business partners unaware of the demands placed on finance and the costs of service provision, this culture also risks plunging huge amounts of both time and money into projects that will not ever deliver long-term returns, according to CEB.