By Forbes Staff,Megan Poinski

Copyright forbes

It’s that time of year when you’re looking at annual budgets and trying to get the most value in different areas. It can be difficult to determine where the value is on B2B software and tech spend. A new study from business and tech consulting firm West Monroe found that budgets and enterprise software costs keep going up—86% said it was higher this year than the previous 12 months, and close to the same amount expect a further increase in the next fiscal year—but with AI and new functions, it’s hard to know if your spending level is appropriate.

As costs go up, the vast majority of executives think they’re overspending on IT. Nearly two-thirds—63%—say they believe they are spending more on IT than their peers. Just 3% think they’re spending less. This can be a bad thing for IT procurement in general; companies may be looking just to save money, not for quality. An overwhelming 93% of companies reported increasing enterprise software costs, and West Monroe’s report found that popular enterprise systems Oracle, SAP and Salesforce have raised prices. However, negotiating the best deals and contract terms—and tapping into market intelligence—could keep the increases lower.

Companies are willingly spending more on AI. Nearly a quarter are dedicating 10% or more of their IT budget to the technology, and 91% of all companies are expecting AI to continue to drive their tech spend up. At this time, however, most don’t see AI cutting down their personnel costs, either for internal employees or third-party contractors—just 8% see a decrease coming to internal employees and 9% for contractors.

In order to make the best buys, West Monroe suggests negotiating tech contracts wherever and whenever possible. It also makes sense to really dig into what you’re paying for: What kinds of AI capabilities are you getting? What is the ROI of a system? Are you paying for more than one software solution that does the same thing?

At least an IT budget can be put together and stay mostly solid a year in advance. Changes to other factors that impact businesses—including tariffs, visa fees, inflation and taxes—have been coming on a constant basis throughout the year. It may make sense to use a financial planning platform that can keep up with so many rapid changes. I talked to Hemant Kapadia, CFO of enterprise planning system Anaplan, about how the current situation has shifted what businesses need. An excerpt from our conversation is later in this newsletter.

This is the published version of Forbes’ CFO newsletter, which offers the latest news for chief finance officers and other leaders focused on the budget. Sign up here to get it delivered to your inbox every Tuesday.

ECONOMIC INDICATORS

Federal Reserve Chair Jerome Powell speaks at the press conference following last week’s Open Market Committee meeting.
Hu Yousong/Xinhua via Getty Images

For the first time this year, the Federal Reserve’s Open Market Committee voted last week to lower interest rates. By a near-unanimous 11-1 vote, members took rates down a quarter point to between 4% and 4.25% from the 4.25% to 4.5% range they have been at since last December. The lone dissenting vote was brand new member Stephen Mirran, who favored a larger half-point cut.

Despite President Donald Trump’s constant rallying for large interest rate cuts, the calculus behind the reduction has been a difficult one. The Fed has a dual mandate: Keeping inflation under control and maximizing employment. With pervasive economic uncertainty across all sectors, inflation has been sticky and persistent at 2.9% in August, and unemployment reached 4.3% with much slower job growth than expected. “It’s a challenging situation when our goals are in tension like this,” Federal Reserve Chairman Jerome Powell said at a press conference after the meeting.

There will likely be two more small rate cuts this year, but this first one will start having positive effects on businesses immediately, writes Forbes senior contributor Rohit Arora. It will be cheaper for companies to borrow money, accelerating investments that have long been in the planning stages. And lower rates mean less money spent on debt service—meaning companies can reallocate some of those funds—as well as potentially more spending power for consumers. For consumers, mortgage rates are likely to fall—which could spur more activity in the housing market and all of the businesses that are lifted by it. Rate cuts tend to send down yields for Treasury bonds as well, which also tends to reduce borrowing costs for credit cards, vehicle purchases and other loans.

HUMAN CAPITAL

President Donald Trump answers a question from a reporter before signing the executive order establishing a $100,000 fee for H-1B visas.
Andrew Harnik/Getty Images

H-1B visas, commonly used by companies to allow specialized foreign workers with college degrees to stay in the U.S., are about to get much more costly. A Friday night proclamation from President Donald Trump hiked the annual fee for the visas to $100,000—up from $780 for employers who petition to receive the visas for their employees, or $215 to be selected through a lottery. There’s an annual cap of about 85,000 H-1B visas for private companies, and the program is used by many U.S. tech companies.

The fee hike fits with the Trump Administration’s pushback on immigration. In August, Commerce Secretary Howard Lutnick said the program is a “scam that lets foreign workers fill American job opportunities,” and Vice President JD Vance has accused tech companies of laying off American workers to apply for H-1B visas.

At this point, it’s unclear how and when the fee hike will take effect, though a White House official told Bloomberg it will only be for new H-1B applicants, not those who already hold the visas. But the policy is already making waves. Deedy Das, a partner at the venture capital firm Menlo Ventures, said the added fees could keep the brightest global talent from working in the U.S., and “if the U.S. ceases to attract the best talent, it drastically reduces its ability to innovate and grow the economy.”

According to federal data, Amazon employed the most workers (10,044) using H-1B visas as of June 30, followed by Tata Consultancy Services (5,505), Microsoft (5,189), Meta (5,123), Apple (4,202) and Google (4,181). The new fee disproportionately affects talent from India—about 73% of H-1B applicants approved in FY 2023 were Indian born, and the subcontinent has been the biggest beneficiary of the visas every year since 2010.

The proclamation is very new, but Forbes senior contributor Stuart Anderson writes there are likely to be lawsuits challenging it. Some attorneys told Anderson they don’t believe the president has authority to change visa issuance rules, and he could not make such a move without Congressional support. It could take time for a court challenge to play out, but Anderson writes the immediate response will likely be global companies locating more of their jobs outside of the U.S., in countries where they can still attract global talent.

President Donald Trump and Republicans in Congress have worked toward changes to taxes for companies and individuals since the beginning of the year. A provision in the House Appropriations Committee’s financial services spending bill, which is working its way through Congress, adds another one: Rescinding a new rule for companies to report more specific tax information in their annual reports.

Forbes senior contributor Howard Gleckman writes this rule, approved by the Financial Accounting Standards Board in 2023, requires companies to give more detailed information about the taxes paid to specific countries, states and localities—as well as what they are paying taxes on. Currently, all of a company’s tax information is reported under a “provision for taxes,” which estimates tax liability for a year, but without any additional details. Gleckman writes investors, analysts and policymakers have wanted this information to make better decisions and get a clearer picture of what companies are doing—though it requires more work from companies.

The FASB is an independent, private-sector organization that establishes accounting standards and isn’t funded by the federal government. It gets its money from accounting support fees paid by publicly traded companies, as well as its own publications and investments. The bill before Congress takes advantage of FASB’s relationship with the SEC, which is required by law to review and approve the accounting support fee that funds FASB. The bill before Congress prohibits the SEC from doing that until the rule is rescinded.

It’s unclear if this provision will become law, especially since sharp partisan disputes in Congress over President Trump’s agenda may lead to a government shutdown at the end of the month. However, other controversial provisions that will change tax rates have already been signed into law. Forbes senior contributor Bob Carlson points out that adjustments to income requirements for different tax breaks have created “stealth taxes,” where personal marginal tax rates increase. While the highest tax rate on the table is 37%, he writes changes to tax breaks and new taxes actually increase the highest marginal tax rate to 45.5%.

OFF THE LEDGER

Why CFOs Need To Constantly Update Their Plans

Anaplan CFO Hemant Kapadia.

With important factors in business changing constantly, there’s more of a burden on the CFO to be able to quickly figure out what everything means for the bottom line. The days of annual forecasting are out. I talked with Hemant Kapadia, CFO of enterprise planning platform Anaplan, about how and why businesses benefit from a continuously updating financial planning process—even when the big changes slow down. This conversation has been edited for length, clarity and continuity.

What do you need to be able to implement this sort of system?

Kapadia: It starts with data: having truly structured, consistent data across your enterprise. That becomes challenging when you’ve got multinational companies that have been built over a conglomeration of acquisitions or various businesses along the way.

Also, having a fairly consistent set of processes. Whether you’re in a manufacturing business, generally you should be measuring your factories in a similar way. You’re running a supply chain, right? So what is your philosophy on bill rates? Your customer at your warehouses? How do you view raw materials strategies? Are you buying ahead? Are you hedging or not hedging? Then on the financial side, how are you pricing to your customers vis-a-vis the length of your supply chain, and what’s the working capital you have involved?

All of those factors influence your ability to make those decisions. It really starts with that structured data, not only on the sales side: in your factories, with the supply base, with the analytics that you do on the backend. What’s supremely important is being able to connect all of those from the front end to the back end of your business. I logically think about the front end being sales, the back end being the financials, where you understand what will happen. Being able to connect those in near real time is really important.

One of the things that I appreciate about what we’ve been able to build here is I basically have daily flows to our financials. Based on our bookings and billings that we have on a daily basis, I know what I spend on the cloud. I know the employees that I have and all of my other fixed costs, et cetera. I know what my revenue and my EBITDA and my cash balances are, and cash flow on a daily basis.

That reduces a lot of stress from being able to know how the quarter’s going to end up, but then also from a standpoint of being able to pivot at any point, to be able to say, ‘Maybe we should adjust our strategies to the marketplace.’

Presumably, the future of business is not always going to be quite so unpredictable and quickly changing. What is the utility of a system like this in a calmer time?

It has the same opportunities. You’re just dealing with a different set of dynamics. The competitive dynamic is: If you’re able to understand who you’re winning against, who you’re losing against, and with what applications or what price points and which markets, that’s really important. That’s something that we’ve been able to do.

Outside of those macro gravity type of influences, you’re always going to add new product innovation. That feedback loop on those new products, whether it be the next widget, next iPhone, whatever it be, going through the supply chain, seeing if your results are consistent with the business case that was underwritten, great. There’s always going to be a benefit to differentiate yourselves versus accomplish with better decisions and better data.

Tell me about what you see as the future of this kind of technology.

If I didn’t say it included AI, I would be remiss. It’s having your own agent, your own analyst that is able to execute on a variety of tasks that would otherwise take a team of two to three individuals to parse through all the data and come up with a conclusion.

The natural evolution of this is going to be: You’re still going to have these platforms. They’re going to be leveraging the same data sets. You’re going to have a human interact with a system through an agent, a virtual analyst. You’ll prompt them accordingly, and then ultimately you’ll get a series of outcomes that’ll say: If I were to change my sales forecast on X, what would I have to do in this factory? And what would be the implication on my supply chain and the workforce and my financials?

Being able to do that type of analytics is going to scale the capability of the individuals within the organization. There’ll be an efficiency play in here, but the ROI is going to be tremendous for those companies that lead into these types of initiatives.

COMINGS + GOINGS

Energy services provider Cinterra named Michael Rothwell as its new chief financial officer. Rothwell had been working previously as interim CFO.

Pool and spa supply firm Leslie’s appointed Jeff White as chief financial officer and treasurer, effective October 5. White most recently worked as chief financial officer at Sportsman’s Warehouse, and he will succeed Tony Iskander, who is resigning.

Hotel investment company RLJ Lodging Trust promoted Nikhil Bhalla to be its new chief financial officer, effective September 18. Bhalla joined the firm in 2015, and most recently worked as senior vice president of finance and treasurer.

STRATEGIES + ADVICE

While you’re working on creating a disruptive strategy to move your company forward, there are a couple of things that can improve both your outlook and the ability of your organization to make it happen: access to good data, and thoughtful use of the best technology for your company.

On earnings calls, most companies would rather engage with analysts who support them and their decisions. However, a new study shows that engaging with more critical analysts can improve a company’s credibility and change those analysts’ negative viewpoints.

Berkshire Hathaway recently sold its entire stake in one of its portfolio companies. Which one?

A. Kraft Heinz

C. Lamar Advertising

See if you got the right answer here.

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