Omar Choucair, CFO, Trintech, has spent 20+ years leading financial and administrative organizations for public and private companies.

This year has been a whirlwind of market-driven financial hurdles and continued workforce challenges, and yet, business leaders remain determined to pivot toward growth objectives for the year ahead. Continued inflation, rising interest rates, foreign currency volatility and a growing threat of a recession will continue to influence forecasting models and growth strategies for 2023.

CFOs and finance departments will follow a delicate balancing act to build and execute a 2023 plan that strategically prioritizes growth and ensures cash flow. How do you decide how to allocate capital? How much should you continue to invest in fighting the war on talent? Reluctantly, most management teams cannot afford to be as aggressive in their business expansion plans as they might have been a year ago.

There is no finance and accounting playbook, no set of proven tactics to guide the decision-making process in prolonged periods of market volatility such as this. CFOs threw those playbooks away three years ago. Instead, they need to approach 2023 armed and equipped with strategic insights gleaned through firsthand experience in this past year.

While much will depend on remaining nimble to prepare for several possible economic scenarios, a few priorities should already be top of mind for CFOs as they begin the forecasting and budgeting process for 2023. Here are the top three key learnings from 2022 that CFOs should keep front and center as they plan for another challenging year ahead.

Implement improved forecasting models and set achievable growth targets.

Despite the aggressive interest rate hikes put forth by the Federal Reserve this year in attempts to cool inflation, the cost of goods and services continues to rise at record-breaking rates. In September, prices (outside of food and fuel) climbed 6.6% over the year—the quickest rate since 1982. There are no signs of inflation slowing anytime soon, and the Fed will likely continue to raise interest rates in an ongoing effort to combat inflation.

Meanwhile, with continued geopolitical tensions in other parts of the world, in combination with the Fed’s battle to keep inflation under control, international investors have helped boost the value of the U.S. dollar, and this is poised to continue in the year ahead. Multinational businesses will continue to see an impact on their earnings in the months ahead, as profits from abroad take a noticeable hit.

Inflation, interest rates and foreign currency will all significantly impact revenue and expenses, and CFOs will be spending more time searching for ways to offset these negative variants. It may be helpful to conduct a thorough vendor spend analysis to help determine which are critical and which are not for the year ahead.

In any case, CFOs will need to implement a flexible forecasting model as these market conditions evolve. Furthermore, company growth targets have been trending down and will be less aggressive for 2023 as the cost of capital remains high and the investment hurdle rates will likely remain constant or slightly more conservative.

Invest in digital transformation to optimize your team and processes.

By now, CFOs and the rest of the C-suite appear to be aligned in terms of digitalization as a high investment priority. According to a recent global survey of CFOs, more than 70% of CFOs surveyed recognized the need to invest in digital technologies as their top priority. Furthermore, a 2022 Protiviti survey found when CFOs were asked about their organization’s most important priority over the next 12 months, respondents specified automation most frequently.

Leveraging digital technologies, such as automation, to modernize financial reporting processes improves efficiency and reporting accuracy, compensates for smaller team sizes and frees up time for finance teams to focus on more strategic, value-additive work. Digital automation can also boost employee engagement and further drive business growth initiatives. Optimizing your operational processes with the right digital tools is critical for business success during periods of continued volatility.

Focus investments on talent retention aligned with business strategy.

In a continued period of workforce challenges, CFOs are still dealing with the fact that wage growth is still trailing inflation rates, despite the significant increase in compensation for finance talent over the past 18 months. Businesses will need to think strategically about where to allocate resources and investments to protect and strengthen their pool of talent.

A recent Deloitte survey of CFOs indicated a greater need for investment in financial planning and analysis capabilities. When asked about the most effective retention methods, 63% of the CFOs said providing career development and clearly defined growth opportunities was most effective.

Additionally, partnering with CPOs or CHROs to implement repeatable talent planning strategies that are aligned with business objectives will also be a high priority. Another 2022 Protiviti survey revealed that “leading companies conduct quarterly assessments of their teams and compare those evaluations to the talent and skills needed to execute the business strategy.” Creating this alignment between talent and business strategy also requires the development of new metrics to identify skills that were at risk and any potential upskilling opportunities. This helps identify investment priorities that can strengthen the business, as well as continue to engage and retain your employees.

Planning for 2023 will be no easy feat for CFOs and finance departments, as they continue to brace for another year of challenging economic conditions. Focusing on cash flow while driving business growth is a delicate balance that will require more accurate forecasting models, as well as more realistic growth targets to keep the business headed in the right direction.

Investments in digital transformation and talent retention are likely to remain top priorities in the year ahead, with the anticipated continuation of workforce challenges and higher demand for business-critical insights from finance teams. A laser focus on these key areas from the past year will position CFOs with a strong and secure 2023 game plan.