This year’s frenzied tariff environment has broadly affected both corporate financial results and finance departments’ planning and forecasting capabilities, according to a new survey across 26 industry sectors.
In a poll of 942 finance leaders worldwide by consulting firm Protiviti, respondents reported that the new and changing tariffs have had at least a moderate impact on profitability (59%) and finance’s ability to prepare timely and reliable forecasts (64%).
Asked to identify the finance activity requiring the most attention due to tariffs, a plurality (39%) pointed to financial planning and analysis, far ahead of the runner-up, contingency planning (17%).
As would be expected, tariff-related forecasting issues are particularly prevalent in the United States, where 76% of those surveyed reported at least a moderate impact, compared with 60% in Europe and 46% in Asia-Pacific. Among industries, manufacturing and distribution organizations are the most affected.
With respect to profitability, finance leaders at financial services, consumer packaged goods and retail companies reported the highest levels of impact. Here as well, U.S.-based companies stand out, with 70% reporting at least a moderate impact.
The research findings also show that a majority of companies are addressing tariff-fueled supply chain concerns by enhancing communication with suppliers (60%) and third-party risk management oversight (52%).
Significant minorities among the surveyed population are sourcing materials and products locally (39%) and diversifying their supply chain to numerous regions (35%). On the other hand, 51% said they have made no changes to their business-process outsourcing or offshoring strategies.
Amid the tariffs and general economic turmoil, CFOs are ideally positioned to serve as the “voice of reason” when answering questions from shareholders, board members and C-suite colleagues.
Questions such as how the tariffs affect the cost of goods sold, transportation and logistics costs, the sustainability of profit margins and whether pricing should be adjusted also require strong cross-functional collaboration, Protiviti advised. CFOs should coordinate activities that involve finance, operating partners, supply chains, legal, tax and marketing teams.
With respect to pricing, for instance, finance can collaborate with operations to run sensitivity analyses of potential pricing changes and related market-share impacts.
“For example, if companies can pass 20% to 30% of tariff-related cost increases to customers, they can use other levers — [such as] strategic sourcing, working capital improvements, or cost optimization — to address elements of the remaining exposure,” Protiviti wrote.
Despite the financial shake-ups wrought by the tariffs, most of those surveyed — 88% at publicly held companies and 68% at private organizations — said they’re at least somewhat confident in their organization’s ability to navigate current economic challenges and uncertainties.
