For finance teams, the chancellor’s spring statement didn’t reveal much we weren’t already anticipating. Spending cuts and stagnant economic growth dominated the agenda. But the standout point was the OBR’s revised economic growth forecasts.
The chancellor revealed that the body has slashed its growth forecast for this year in half from 2% to 1%. It paints a painful picture considering the impending rises to employer National Insurance Contributions (NICs) are already seeing businesses cutting costs and headcount.
With the OBR’s forecasts for growth in subsequent years upgraded, the message is buckle up, ride the waves and smooth waters will return for coasting ahead with growth plans. But what’s not been picked up in the spring statement discourse is the beneficial headwinds heading Europe’s way from across the Atlantic. So while many organisations are entering a period of damage limitation, there’s scope for plenty of opportunity too.
What this landscape can expose is how equipped or not finance functions are to deal with this turbulence. Regardless of ongoing uncertainty and unpredictable market trends, the importance of investing in technology remains unwavering. With the right tools at your disposal, growth doesn’t have to wait.
Invest in tech, don’t digress (but smartly)
In the fintech sector, the UK is renowned for its strong growth – it ranks second in the world behind the US and attracted $3.6bn of investment in 2024. Yes, it’s worth noting these investment levels were down 37% from 2023 and lag behind those seen in the US. However, the tides are turning: stock investors are now shifting money from the US to Europe.
If the government can latch onto this shift and strike while the iron’s hot, they can turn challenges into opportunities for innovation, scaling businesses and the long-term growth of the UK’s technology ecosystem. So, it’s pivotal the government ensures investment keeps pace with the rapid advancements in technology to maintain, even enhance, its place in the global order.
What this does also show is that, despite the stagnant climate, opportunities are still very much available for companies to invest in their finance software through providers. They just need to be smart with their investments and find technology with capabilities suited to their size, offering optimal value for money.
This includes recognising when their current finance system has too many capabilities and complexity for their needs, which means they could be paying for features they don’t even use.
Why real-time data is crucial to NIC rises
Finance teams are preparing for operational challenges, especially as employer NICs will rise from April.
This increase will pressure businesses to reassess staffing levels and operational efficiencies at a time when finance leaders are already seeking ways to accomplish more with less. CFOs will need to navigate significant cost pressures and therefore get smart with resource allocation.
In times of economic uncertainty, one of the biggest threats to businesses is the inability to access real-time financial data. Companies can be blighted by a range of overly complex systems that lack connectivity and hinder a unified overview of financial performance across their entities, departments and locations. This limits their ability to scale and adapt to abrupt market changes.
Yet this doesn’t need to be the case. The latest finance systems come with a whole range of API integrations that can connect to critical business systems and form a central location for company-wide data. With this visibility, increases like NICs don’t necessarily have to lead to significant cuts: accurate insights and reporting allow CFOs to see how reallocating resources can help trim costs, or to understand why certain locations are performing well and use this to improve revenue across the business.
Tech certainty in a changing world
The government has been forthright in its ambition to inject technology into public services. The transformation fund in the spring statement was an example of using digital tools to improve department efficiency and trim costs.
But it’s an ambition outdated technology and a lack of quality data and skills could undermine, an experience many finance teams also are dealing with. Technology is an enabler for all businesses, and the government should support UK businesses in transitioning away from outdated systems that hinder growth toward an agile, AI-driven future.
The role of the CFO has evolved to contribute to operations across the business, not solely in the finance function. Performing this role well hinges on integrating better technology and automation capabilities to make faster, more informed decisions at a time when it matters most.
Getting finance teams up to speed with software through training and improving their workloads with automation can make an incredible difference to both business performance and improving their work-life balance. And in the face of tumultuous external challenges, having more time to focus on value-adding tasks can make all the difference in effectively mitigating these obstacles.
“The world has changed,” the chancellor told parliament as she outlined her spring statement. But for finance teams, a tech-driven approach provides the certainty to manage this change: the market presents opportunities for companies to invest in their finance software to overcome uncertainty and pursue their growth ambitions.
Meet the AccountsIQ team on stand 790 at Accountex London, taking place at Excel London on the 14-15 May, 2025.
