Cash flow keeping Singapore finance leaders awake at night

04 September 2013

Singapore the most 'cost conscious' nation when it comes to cash flow

[Singapore], 5 September, 2013:  If there is one business problem keeping Singapore's finance leaders awake at night, it is maintaining a positive cash flow.

According to new research by specialist recruitment firm Robert Half, more than one-third (36 per cent) of Chief Financial Officers (CFOs) in Singapore are concerned about available cash flow within their business. This figure rises to 40 per cent and 48 per cent for medium and large companies respectively.

The survey involved 2,525 CFOs and Finance Directors from 17 countries, including 150 from Singapore. Globally, 32 per cent of finance leaders are concerned about available cash flow within their business.

While finance leaders agree they rely heavily on liquid capital to keep their business running as usual, there is more variation on the reasons why they struggle to maintain a strong positive cash flow.

TABLE 1:  What three factors have contributed towards your concerns around cash flow?

 

All Countries

Singapore

Switzerland

Australia

Hong Kong

Japan

Slow paying customers

59%

56%

64%

66%

67%

40%

Higher business expenditures 

46%

67%

57%

47%

55%

50%

Lower revenue

41%

50%

57%

34%

42%

42%

Customer / client insolvencies

34%

30%

29%

34%

33%

30%

Higher taxes

32%

19%

43%

32%

15%

38%

Competitive pricing / low margins

29%

30%

14%

27%

38%

24%

Higher cost of short-term financing

22%

17%

14%

25%

13%

26%

Difficulty securing financing

20%

15%

14%

13%

15%

16%

Rapid growth / new investment opportunities

10%

9%

7%

15%

13%

20%

R&D / new product development

6%

9%

0%

6%

7%

14%

In Singapore the biggest contributor to cash flow concerns is the rising cost of doing business - particularly rents, salaries and commodity prices. Higher business expenditures were nominated as the biggest cash flow issue by 67 per cent of Singapore CFOs compared to just 46 per cent globally. 

No other country is as concerned about rising costs as Singapore - the next closest is Switzerland with 57 per cent and Hong Kong with 55 per cent.  This makes Singapore CFOs and Finance Directors the most ‘cost conscious’ in the world when it comes to tackling cashflow issues.

In contrast, Singapore finance leaders are among the least concerned about taxes with just 19 per cent nominating it as a cash flow problem, compared to 32 per cent globally.

Globally the biggest contributor to cash flow problems is slow paying customers, which is the second most common concern for Singapore finance leaders at 56 per cent.  

Ms Stella Tang, Director of Robert Half in Singapore said managing cash flow is at the heart of the CFO’s role. 

"If a company cannot achieve and maintain a positive cash flow, it will fail.  A good finance department will manage the competing needs for expenditure to grow the business against the need to prudently manage costs."

"In Singapore, the increasing cost of doing business is placing pressure on CFOs and Finance directors to keep costs down.  That's why they are the most cost conscious of any country in the survey," Ms Tang said.

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