CFOs Seen Taking on New Leadership Role in Global Trade Management

Process improvements directly improving price/earnings ratio, market capitalization and cash flow, Aberdeen finds

Process improvements directly improving price/earnings ratio, market capitalization and cash flow, Aberdeen finds

Boston — October 19, 2005 — Two-thirds of companies in a recent survey said that improving global trade management is among their three most important initiatives, and 35 percent of companies report that chief financial officers (CFOs) are increasingly taking a leadership role in these initiatives, according to a recent report from AberdeenGroup.

According to "The CFO's Agenda for Global Trade," a new Aberdeen benchmark report, the ability to improve global sourcing is now determining a company's revenue growth, profitability and market success. A $1 billion company can free up $10 million to $40 million in cash by better controlling global trade processes, directly impacting price/earnings ratio and market capitalization.

As more of the business is tied up in global trade, working capital cycles become longer and harder to manage. More working capital is tied up in inventory to combat longer and more uncertain international lead times, proactive use of accounts payables balances degrade, accounts receivables become slower and cash movement becomes more complex.

"CFOs are in a unique position to lead the drive toward less risky and more effective trade processes," said Beth Enslow, vice president of enterprise research and report author. "They see the impact of business tradeoffs on strategic corporate objectives and financial performance. They also have corporate governance responsibilities to ensure fiscally responsible operations."

Other key findings in the report include:

  • More than two-thirds of companies have current projects or future plans to enhance financial management systems and trade compliance technology.

  • Innovators are taking advantage of physical supply chain triggers to apply pre-, in-transit, or post-shipment inventory financing, discounting or payables extensions.

  • Nearly three-quarters of companies plan to increase their use of trade services from financial institutions to lower transaction costs, smooth cash flow and make it easier for international customers and suppliers to do business with them.
The report is available for free at

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