Tatum, a leading professional and interim services firm offering hands-on strategic, financial and technology solutions that measurably improve business performance, today announced the results of its third quarter Survey of Business Conditions, a high-level executive survey based on the opinions of Tatum's chief financial officer (CFO) partners and external CFOs. 

Through the monthly Survey of Business Conditions survey, respondents reflected on 30-day business trends and projected business conditions for the next 60 days. These responses are reflected in the quarterly Tatum Survey of Business Conditions, which indicates that both Tatum partners and external CFOs are seeing improved conditions that will likely be sustained through the end of the year. Moreover, although pluralities of Tatum and external CFOs reported that business conditions remained stable in the past 30 days, a substantial amount (44 percent and 47 percent, respectively) reported that conditions have improved and they expect continued improvement for the near future.

The survey also drilled down into the subject of sales forecasting and forecasting processes, offering timely insight as CFOs enter the 2015 budgeting cycle. Interestingly, only 65 percent of respondents reported that their company's actual results are tracking closely to their 2014 forecasts, as defined as having a variance of five percent or less. Many companies are performing below forecast, with reasons cited being largely on the demand side and internal, such as unrealistic goals and sales strategies or slow adjustments to market realities. 

The majority, however, are confident their companies can produce more reliable forecasts going into 2015. In addition to improving market conditions and a more stable operating environment, they also cited forecasting process "controllables" like better business intelligence, enhanced tools and increased cross-functional participation and accountability. Moreover, when asked about the external factors that might make forecasting their company's revenue in 2015 a challenge, the most frequently cited factors were macro-economic conditions and uncertainty around those conditions, such as GDP growth, interest rates and employment.

Based on monthly survey results, Tatum constructs its Index of Business Conditions. Recently validated as a significant predictor of future business conditions, the Index is an average of the ratio of Tatum partners who report improvement versus those reporting a worsening of business conditions for the past 30 days and the next 60 days. For October, the Index increased significantly, presenting a positive outlook at the start of the fourth quarter.

"As the business climate continues to change rapidly from week to week, Tatum remains committed to keeping our finger on the pulse of the U.S. economy and providing useful insight to help organizations prepare for the months ahead," said Suzanne Donner, Managing Partner, Knowledge Management for Tatum. "By surveying our internal CFO partners and external financial leaders, we gain unprecedented insight into how these professionals view trends and challenges that arise each month and the practices they are using to ensure success. As such, our Survey of Business Conditions lets us know what is on the mind of the CFO, providing the insight to predict future business activity."

Tatum has made its third quarter 2014 Survey of Business Conditions available for download at: http://www.tatum-us.com/documents/ThirdQuarterTatum_SoBCDetailReport.pdf.