These are the 4 biggest risks to your revenue earnings

Quick: What would you say is the biggest threat that could derail your business in the coming months? 

Unfortunately there are no shortage of them – if you ask your fellow finance pros.

The Association for Financial Professionals’ (AFP) 2021 Risk Survey identifies just where the greatest exposures lie.

And not just in the short term.

In the survey, your peers flagged what they see as the biggest threats to their revenue earnings for the next three years.

So how do their concerns stack up in comparison to yours?

Take a look at the top four risks AFP uncovered and how you can make sure they don’t turn into a costly problem for you.

1. Strategic risks

This claimed the top spot when it comes to your peers’ concerns. Nearly half (49%) of the survey respondents cited strategic risk as an issue.

More specifically, the types of strategic risks include things like:

• competitor disruptions
• industry disruptions
• evolving customer demand, and
• purchasing behavior.

Early warning here can make all the difference. Be sure to enlist everyone who can help on these fronts and even spot warning signs before Finance does.

For example, Sales may be aware of customer situations that can impact purchasing behavior long before you’d see it in financials.

2. Business operations interruptions

This risk may have gotten the most attention in recent years, which is why 39% of your peers have it on their radar now.

But beyond the supply chain disruptions, which feel like the most obvious concern, your peers have ID’d several other threats to their business operations. Make sure you’re also preparing for potential issues with:

• production interruptions
• litigation
• labor
• outsourcing, and
• IT.

Each of these has the potential to throw your business into a situation that could negatively impact your revenue for several years.

No time like the present to make sure the rest of the C-suite understand all the factors required in your business continuity plans.

3. Macroeconomic risks

Of course all businesses operate within the larger picture of the U.S. and even the global economy.

And those come with their own risks that have 36% of your fellow finance execs on alert. Specifically:

• the pace of GDP
• growth
• inflation, and
• interest rates.

The Fed didn’t make a move at its last meeting. But it did signal that next month will likely be the first of its promised interest rate hikes of 2022.

4. Financial risks

Last, but certainly not least, 30% of your peers see the potential threats to their revenue lying in financial factors, such as:

• credit
• liquidity, and
• currency/FX.

As CFO, you’re in the driver’s seat on this front so you’ll want to be ready to react.

Info: For more on the AFP 2021 Risk Survey, go to afponline.org/publications-data-tools/reports/survey-research-economic-data/Details/risk-2017