CFOs are no longer just financial overseers—they’re strategic leaders driving innovation in pricing and inventory management. Businesses that thrive amid rising costs and economic uncertainty have one thing in common: a CFO who embraces adaptability, data-driven decision-making, and emerging technologies.
An example of this is seen in Intuilize CEO Nelson Valderrama's MDM article, which highlights how one CFO revamped their company’s pricing approach by incorporating transportation and replenishment expenses into their landed cost calculations. This level of detail allowed the company to negotiate better deals and gain future cost insights.
To stay competitive during inflation, CFOs need to carefully analyze their pricing keeping these four strategies in mind:
Inflation disrupts supply chains, making it difficult to negotiate with suppliers. CFOs must enhance visibility into input costs like labor and transportation, allowing them to make informed decisions during negotiations.
Traditional compensation increases fail to keep up with inflation. CFOs are recalibrating their recruitment and retention strategies, focusing on employee engagement and livable wages to keep talent during tough economic times.
Optimizing working capital is more effective than taking on new debt. By analyzing transaction data, CFOs can uncover patterns in receivables and payables to improve financial efficiency.
Gone are the days of cost-plus pricing. CFOs need a granular understanding of profitability at the product and customer levels, enabling them to adjust prices dynamically and protect margins.
CFOs must also focus on inventory optimization, especially in distribution. They need to streamline stock levels, emphasizing high-performing products while minimizing investment in underperforming ones. Failure to do so can lead to significant margin erosion, as delays in adjusting prices to match rising costs can result in lost profits.
Technology plays a pivotal role in this process. Platforms like Intuilize enable real-time adjustments to pricing and inventory processes, giving companies the agility to stay competitive.
Many ERP systems now offer built-in pricing capabilities, which allow companies to adjust prices quickly and efficiently. CFOs who take advantage of these features streamline their pricing processes, ensuring their teams follow best practices while maintaining margins.
With the right financial leadership, companies can adapt and thrive during inflation. Rock star CFOs are crucial in driving pricing innovation, optimizing inventory, and leading their organizations through economic uncertainty.
Want to learn more about how CFOs are navigating inflation? Read the full article here.