Forty percent of senior finance executives at midsize companies say that lack of bargaining power with customers and suppliers is their biggest obstacle in improving cash and working capital management.
In a new survey by American Express and CFO Research, 47 percent of the 323 finance executives who were polled at midsize companies said that larger companies have used their bargaining power to force them to accept slower payments. Forty-four percent of the survey respondents acknowledged that even when they held a negotiating advantage, they had trouble inducing suppliers and vendors to accept changes in payment terms.
In addition, 34 percent of the senior finance executives said that maintaining financial discipline will become easier in the coming year. However, 41 percent said they expect it will become more difficult as financial and personnel resources are allocated to meet new growth prospects.
The vast majority (85 percent) of the finance executives surveyed at midsized companies said they are more financially disciplined in the aftermath of the recent downturn. At the same time, the finance executives recognize the value of maintaining fiscal discipline. Sixty-nine percent of the survey respondents said that financial discipline will contribute to their competitive advantage over the next year, in contrast with the 18 percent who said this would limit their company’s competitive advantage.
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