CFOs rely on short-term fixes to combat credit crunch

A KPMG survey of chief financial officers, conducted by CFO Europe magazine, has found companies are relying on short-term fixes to combat the pressure of the credit crunch, negotiating longer payment terms with their suppliers and tightening credit terms.

In addition, 92% of respondents said their customers were trying to stretch payment terms, while 87% were seeing suppliers demand earlier payment of invoices.

'Although it may not feel like it now, the credit crunch represents a chance to push through reforms of working capital systems, and not just rely on ‘quick fixes’ which aren’t sustainable in the long-term,' Roger Bayly, KPMG restructuring partner said.

The survey also found that only 14% of respondents said their cash flow forecasts were on target during the past 12 months and only 5% said they didn’t attempt any form of cash forecasting at all.