Are you confident in your business financial posture and strategy?
- Philippe Prévost
- May 22
- 3 min read
PORTRAIT OF QUEBEC COMPANIES: AN UNSTABLE FINANCIAL CONTEXT
The financial situation of Quebec businesses presents mixed signals. According to recent data, in the second quarter of 2024, the proportion of businesses with the necessary cash flow to operate (80.8%) declined by 3.2 points compared to the previous quarter. Even more concerning, the ability to take on additional debt fell to 71.2%, a decrease of 7.0 points in a single quarter. This weakening comes at a time when only 13.3% of businesses plan to apply for a business loan in the coming months.
Meanwhile, approximately 7 in 10 businesses (71.4%) maintained or increased their revenues in 2023 compared to 2022, demonstrating a degree of resilience despite economic challenges. However, this performance varies considerably across sectors and regions, highlighting significant disparities in the financial health of businesses in Quebec's mid-market.
WHY THIS SITUATION?
Several factors explain this reality:
1. Accelerated Digital Transformation**: Businesses are facing a digital transformation imperative requiring significant investment, as 77% of CFOs now see their role expanding to include the digital reinvention of their organization.
2. Changing economic context**: The post-pandemic economic recovery is gradual, with real GDP growth of 1.1% after eight months in 2024. Inflation has moderated to 1.6% in October 2024, creating a more stable but still uncertain environment.
3. Evolution of the role of the financial department**: The shift from the CFO (Chief Financial Officer) to a more strategic role of CPO (Chief Performance Officer) or CVO (Chief Value Officer) is transforming the way companies approach their financial management, creating adaptation challenges.
4. Margin Pressure**: Supply challenges and rising operating costs continue to put pressure on companies' profit margins, especially in the manufacturing and distribution sectors.
QUESTIONS TO ASK YOURSELF
To assess your financial posture, ask yourself these essential questions:
Does your business have the cash flow to weather a 3-6 month period of uncertainty?
-Do you have clear visibility into your key financial performance indicators in real time?
-Is your financing strategy aligned with your medium and long-term business objectives?
Does your finance function play a strategic partner role or does it remain confined to traditional operations?
Have you assessed the potential impact of digital transformation on your business model and financing needs?
Do your information systems enable agile decision-making based on reliable data?
WHAT 1+1 DOES: STRATEGIC INTERVENTION
The equation is simple: traditional financial management + an integrated strategic approach = sustainable value creation.
The modern CFO no longer just manages numbers; he becomes the engine of added value:
Business strategy architect, actively exploring new growth opportunities
-Guarantor of overall performance, integrating financial and extra-financial dimensions
-Digital transformation driver, optimizing processes and promoting data exploitation
Operations partner, directly contributing to performance improvement
This transformation requires dual expertise: technical and strategic, allowing for rigorous data analysis while maintaining a global vision of the company's development.
THE IMPACT OF THE INTERVENTION: TANGIBLE RESULTS
Strategic intervention with the finance function generates measurable results:
Improvement of operating margin by 2 to 5 points on average through optimization of financial processes
Reduce decision-making cycles by 40% thanks to dynamic dashboards and real-time data
-Increased investment capacity through better allocation of resources and optimization of working capital
-Increasing resilience to economic uncertainties through proactive risk management
Increased company valuation through improved financial and extra-financial performance indicators
Companies that successfully position their finance function as a strategic partner to the organization consistently outperform their competitors in both growth and profitability.
Is your company ready for this transformation? Contact us to assess your financial maturity and identify the value creation levers suited to your context.
