Discussion and analysis of the upcoming election is everywhere. Even if you somehow manage to avoid the 24 hour news cycle, there’s a constant stream of content across social media to keep you informed, whether you like it or not.
For finance leaders navigating CFO election uncertainty, that’s not a bad thing, because the election is an event that’s likely to have a major impact on their decision-making in the coming months. Indeed, it’s already having an effect.
According to a recent Duke-Fed survey, 30% of CFOs are scaling back investments due to concerns about the potential impact of the election, while others expect slower revenue growth and a delay in economic recovery.
However, this uncertainty also presents opportunities. The cautious stance many companies are taking today could lead to a wave of investment and growth once the election outcome becomes clear, especially for those who are prepared to act quickly.
In this article, we’ll explore how CFOs can manage election-related risks while positioning their companies for future growth.
How Election Uncertainty is Impacting CFO Decisions
So, nearly a third of CFOs are scaling back or postponing investment plans due to political uncertainty, according to the survey. This cautious stance is understandable. Any election can bring significant shifts in policy, regulation, and economic outlook, but this one in particular is shaping up to be especially contentious.
The end result is the potential for impacts to business planning and investments.
CFOs are also wary about the broader implications for their organizations. The survey highlights concerns around slowing revenue growth and job creation, with some finance leaders even doubting their ability to recoup 2024 losses in 2025.
This sense of unpredictability is leading many companies to adopt a “wait-and-see” approach, pausing capital expenditures and focusing on preserving liquidity.
But challenge presents potential opportunity. The pent-up cash from scaled-back investments means that once the political landscape stabilizes, companies that have effectively managed their liquidity (and planned for multiple scenarios) will be well-positioned to act quickly.
This could put them ahead of the competition and in prime position to seize growth opportunities, expand operations, and invest in strategic projects.
And while the scale back of investment might be worrying, it’s worth looking a little closer at the data from the Duke-Fed survey. Because despite the cautious approach to investment, CFOs are generally optimistic about the near term future. Those surveyed were asked to score their level of optimism on a scale of 0-100, with the mean score for all respondents coming in at 69.
Putting this all together, the survey could be best described as CFOs displaying ‘cautious optimism’ about the future, despite the upheaval that an election can bring. The key to navigating this uncertainty is to balance risk management with readiness.
The Role of Cash and Liquidity Management Amidst CFO Election Uncertainty
During periods of uncertainty (like the months leading up to a major election) cash flow management and liquidity optimization become even more important for CFOs. With many firms choosing to delay or scale back capital expenditures, having robust liquidity practices in place allows businesses to remain financially resilient while also ready to take advantage of future opportunities.
Balancing Capital Preservation With Opportunity
As the Duke/Fed survey suggests, reserving cash is a natural response in the face of uncertainty. But simply holding on to cash without a strategy is a recipe for long term underperformance.
CFOs need to ensure they have enough liquidity to provide sufficient risk protection, but they must also be ready to deploy cash when the time is right.
An effective liquidity management strategy includes:
Optimizing cash flow forecasting
Accurate and real-time cash flow forecasting helps CFOs know when and where cash will be needed. This should include detailed scenario planning, to allow CFOs to ‘see the future’ and plan accordingly.
Efficient cash allocation
Understanding when capital might be needed and planning accordingly allows for better decision-making, whether that means investing in short-term instruments for yield or keeping cash readily available to jump on opportunities once market conditions improve.
How Trovata Can Help CFOs Navigate Uncertainty
Uncertainty can’t mean battening down the hatches and waiting for clear skies. At that point, your competitors are already implementing growth plans that have been ready for months. Now is the time for the real work, utilizing the right tools to plan scenarios and optimize liquidity, while maintaining real-time oversight of the financials to monitor performance.
Trovata gives CFOs access to data and the finance-specific tools to analyze it, to allow them to manage their financial operations with confidence and act quickly when situations change.
Real-time Cash Visibility
It should be simple to see where your cash is at any given moment. But it’s one of the most significant challenges CFOs face. With Trovata, CFOs have instant, real-time access to their multibank cash balances, across all their entities and subsidiaries.
Powered by open banking APIs, the data is not only updated in real-time, but with far more depth through extensive metadata.
This visibility allows finance leaders to make timely, data-driven decisions — whether it’s preserving liquidity, reallocating resources, or identifying funds that could be better utilized. By knowing exactly where cash is at all times, CFOs can be more agile in response to changing conditions.
Recommended: Check out our recent episode of Fintech Corner as Brett chats with Lisa Davis and Ray Nazloomian from JP Morgan, delving into how emerging technology like APIs and generative AI, is revolutionizing TMS capabilities and is ushering in a new era of flexibility, agility, and strategic insight for finance teams.
Comprehensive Forecasting and Scenario Planning
Uncertainty demands contingency planning. Trovata makes it not just possible but easy, with the ability to create dynamic cash forecasts and run “what-if” scenarios to better understand the impact of various election outcomes.
Whether it’s a change in tax policy, shifts in interest rates, or broader economic impacts, Trovata’s scenario planning tools help CFOs plan for multiple contingencies. This proactive approach ensures that companies can be ready for almost any scenario.
Optimizing Liquidity
When capital expenditure plans are on hold, operational stability relies on that capital being managed appropriately. Trovata centralizes cash and liquidity data from all your accounts, giving CFOs a single platform for managing funds.
This centralized visibility enables finance leaders to optimize liquidity by identifying idle cash and determining the best way to allocate it — whether for immediate needs, short-term investments, or maintaining a liquidity buffer. By managing liquidity proactively, CFOs can keep operations running smoothly, even if investment plans are delayed.
Trovata’s tools are designed to help CFOs not only manage risk during uncertain times but also keep their organizations in a position to capitalize on opportunities as soon as they become available.
Future-Proofing for Growth Beyond 2024
This is where many CFOs will be looking. While there is uncertainty around this election cycle, it’s clear that many have a somewhat more optimistic view over the longer term. And in fact, the best strategy will be able to combine these two aspects, providing security and risk management in the immediate future, while positioning the company to take advantage of growth opportunities in 2025 and beyond.
Once the political landscape stabilizes, companies that have effectively managed their liquidity and stayed agile will be in a prime position to rebound quickly and capitalize on pent-up opportunities.
There are three key aspects to maximizing growth potential post-election:
1. Seeing Through the Spin
One of the key aspects to preparing for after the election is to see through the rhetoric and spin. The news cycle can become very toxic, and it can be a challenge to understand how the fundamental policy positions will impact a business.
Regardless of your political leanings, there are likely to be both benefits and downsides to each candidate. Viewing these in an analytical and dispassionate way can provide a real competitive advantage.
2. Maintaining Strong Fundamentals
Either way, it’s not possible to adapt if you don’t maintain operational efficiency. Fundamental to this is keeping a high level of control over cash flows and liquidity. Accurate cash forecasting and efficient liquidity management also enables CFOs to ensure that their businesses are operating as efficiently as possible.
In short, companies can’t grow if they’re scrabbling to stay afloat. Solid fundamentals and efficient operations are table stakes for taking advantage of new growth opportunities.
3. Identifying Growth Opportunities
With a business foundation of steady revenue growth, efficient operations and healthy liquidity and risk management procedures, companies have a base from which to springboard into growth opportunities.
But there will almost certainly continue to be a huge amount of noise to these potential opportunities, even after the election. CFOs need to be able to utilize the right tools and datasets to analyze and understand which opportunities provide the most potential upside, with the least amount of risk.
Scenario planning is again an incredibly useful tool here, allowing finance teams to assess the potential outcomes for investment in a range of different areas.
Navigating Uncertainty and Seizing Opportunity
As the election approaches, uncertainty is inevitable, but it doesn’t have to be a barrier to progress. By proactively managing cash flow, optimizing liquidity, and planning for multiple contingencies, CFOs can not only mitigate risks but also position their companies for growth when clarity returns.
Trovata is designed from the ground up for finance leaders, helping navigate turbulent times with agility and confidence.
With real-time cash visibility, sophisticated forecasting, and liquidity optimization, Trovata empowers CFOs to make data-driven decisions, maintain stability, and be ready for opportunities as they emerge. By effectively managing uncertainty today, companies can build a foundation for growth beyond 2024, ensuring that they’re ready to capitalize on the opportunities that lie ahead.
Ready to take charge of your cash management and prepare for future growth? Book a demo today.
