Traditionally, the CFO represents the Finance function, just as the CMO represents the Marketing function, the CTO the Technology function and so on. Within the finance function, the CFO is expected to deal with accounting, taxation (both direct and indirect), banking, auditing, working capital management, risk management, corporate governance, internal controls, investor relationships (esp. relevant in case of a listed company), budgeting, costing. He has also to deal with various tax authorities (income tax/service tax/customs/excise/VAT etc. depts.), external stakeholders (customers and vendors for important commercial negotiations, auditors, govt. depts., stock exchanges and analysts in case of a listed company and private equity and VC investors in case of a private company), Board members (to explain the company’s performance, satisfy them regarding the company’s corporate governance processes etc.), company executives (i.e. heads of other functions and colleagues within the company in connection with the company’s operations), CFO’s of other companies (to share knowledge/information that may be useful to each other) etc.. Continue reading
Union Budget 2015 came as a pleasant surprise for the business community. Loaded with several tax relief for corporate and start ups, it can well be seen as a good step towards the agenda of ease of doing business.
The budget is a representation of 2 Is, investment and infrastructure. Finance minister had bounties on offer even for the last man in the row; that would be MSMEs. The budget carries huge thrust for SMEs and MSMEs as they will be able to access funds. Let’s have a quick look at some important tax sops, granted by the FM. Continue reading
I am a die hard cricket buff, you may be thinking what’s unique about that especially in India where a majority of us are not just buffs but have strong opinions on the game and especially on the Indian cricket team. The recently concluded world cup was a spectacle and lived up to its billing as being exciting and equally at times being very predictable. Predictable since champion players came back with their reputations enhanced while certain teams played like how champion teams do and should play. Team games like cricket are similar to corporations, being an amalgamation of people who come together and ‘play’ for a purpose, which is to give their best and eventually win.
The World Cup got me thinking on whether there are any parallels between these two worlds; the world of business and the world of cricket. Here are 10 lessons that I took out from the Cricket World Cup 2015:
- Don’t underestimate the opposition
The upsets caused by the ‘so called’ smaller cricketing nations like Bangladesh and Ireland where they upset bigger opposition teams, makes me think no matter how big or small your opposition/ competition, it is never a good idea to take them lightly or dismiss them. One need not lose sleep thinking about the opposition but don’t make the mistake of thinking that you are invincible however big or strong you may be
- Respect the conditions
Just like how cricketers need to adapt to the pitch, the conditions, the direction of the breeze businesses (which puts them in a bit of uncertainty every time they play), businesses also face the uncertainty of markets, customer behaviour, people and competition. Every company needs to respect the conditions or the rules of the game. Despite having the best players and using the best technology in the game, if one is does not adapt to the conditions, the game will be up very soon
- Play to your strengths
A Smart team lead by an astute captain will play to his team’s strengths. The Indian team lead by Kapil Dev in 1983 had good medium pace bowlers who could just about swing the cricket ball. They did not have pace bowlers, which teams like West Indies and Australia had at that point in time. The conditions favoured swing bowling and India saw a weakness in the way West Indies batted on the 25th of June, 1983 which allowed them to cause an ‘upset’. Had they aped what other teams were doing and believed what they did was right, they wouldn’t have picked the team that eventually went on to win the cup. Businesses, CEO’s and entrepreneurs must also take decisions within a certain context. Playing to the strengths of the team and the business proposition within a context should be their prerogative.
- The captain need not be the best man
A common belief atleast with most businesses is that a leader should always be the ‘best’; a leader should be more aware, more articulate, more knowledgeable and more intelligent. That explains why we a lot of businesses have not been able to attract and retain top notch managers/ talent. A leader should be someone who steps in to fill the gaps that the team is not able to fill regardless of the function where the gap is. A leader also needs to be able to get the team together to be able to guide them towards a purpose, which is larger than self. The best example is a Mahendra Singh Dhoni who we all agree may not be the most gifted cricketer and yet has been India’s best captain till date. You need more than just skills to reach the top and stay there
- Use technology as an enabler and don’t become a slave
The penetration of technology into sports has enabled teams to analyse performance, iron out weaknesses and study the opposition to spot areas, which can be targeted. How much ever one uses technology, the execution of the strategy derived through technology on the field is what separates a winner from the rest. Technology is an enabler, it is a not a substitute to contextual thinking/ decision-making. The software will only help us get to a point, beyond that leaders take the call. It is important to build technology-enabled businesses but leaders need to have the wisdom to question/ improve the technology itself and take calls which technology sometimes may not be able to do.
- The experts are not always right
Every leader should surround himself/herself with people who are better than him/her. There are advisors, a board, mentors around great leaders and the corollary that they became great is because they surrounded themselves with great people. While it is extremely important to listen and heed to the advice given by experts, one must not stop at just that. There is a need to use one’s judgement, instincts and an understanding of the business itself since a leader plays the game on the ‘pitch’ while the role of the coaches, mentors and experts is beyond the ‘boundary line’
- Talent will give you an edge but won’t take you all the way
‘What got you here, won’t take you there’ is an oft-used adage. This means that what you did for a certain period of time or during a certain stage in life or business may not be relevant when you need to shift gears. People whether in sports or in business who last longer are not necessarily the ones who are the most talented, the most intelligent people; these are people who have stayed the course, have seen the ups and downs, have got better at their game and not thrown it away. There have been some extremely talented cricketers who have risen through the ranks and played for India but there have been only very few who have lasted for long by being consistent and gone on to attain ‘greatness’
- Getting up every time you fall
During the world cup, what caught my attention was this moment from the Australia vs New Zealand game during the league stages. McCullum was hit on his forearm by a thunderbolt by Mitchell Johnson. The pain was severe. The target was small and McCullum could have walked back to the pavilion and allow others to finish the game. He instead stayed back and bludgeoned the aussie attack over the next few overs. The game went on to the wire but the captain’s heroics caught everyone’s imagination.
As a leader, you are vulnerable and may occasionally display your vulnerable side; what is important is to get back on your feet every time you are stuck. When the leader is down, it has a psychological impact on the team. Getting up doesn’t mean the pain doesn’t exist, it just means that you have found the will to overcome the pain
- Play for the paying spectators first and then for yourself
Businesses exist because of customers. They should be placed at the centre of the universe and not at the periphery. If one is not able to deliver solutions to the ‘paying’ customer/(s) then one doesn’t deserve to be in business. Business leaders and corporations have grown today simply because of their customers and focus on customers. Similarly in cricket, the paying spectator creates the players. Imagine a scenario where a player becomes famous by playing in front of ‘empty stands’. Not possible!
- Champion teams are created through discipline and culture
Why is Australia the most successful cricket team ever? It is their commitment to the cause, the work ethic, discipline, execution of plans and players who are lead by captains who put the team above everything else. Champion teams are created through sustained teamwork, discipline and culture so is the case with Champion organizations. They were built over a period of time and had outstanding leaders in every era who not just carried on the ‘flame’ passed on to them but also improved it every time this was passed on to the next generation of leaders.
E-commerce defies conventional laws
Basic principles of finance have not changed that much in the last century: Businesses exist to make profits and generating positive cash flows is important.
Given the recent developments in the e-commerce space, several ‘old school’ finance professionals are unsure whether the ‘universal’ and ‘time-tested’ principles will ever hold good in the future. Valuations of most e-commerce deals in the recent past have been at astronomical levels, most often expressed as several multiples of sales. It’s common knowledge that virtually every e-commerce company in India is losing money today. So, why are investors paying a sales linked multiple (and a premium at that!) for buying into a loss making company.
Worried that your assistant picks up the bag the minute the clock strikes five pm and you can do nothing about it? Or that your finance department is under enormous stress when D days like September 30 (income tax filing for corporates) or March 31 are round the corner? Worse still, your Diwali shopping festival logos are still incomplete?
There appears a solution to all of the above in the form of organizational outsourced services providers. From virtual secretaries who will do any errand for you to outsourced marketing head and CFO (chief financial services) providers, the traditional organisational structure chart is in for a make over. Today , such on call executives are game for anything, be it complex stuff like hand holding you till your IPO (initial public offering) exercise is complete to even the mundane data entry operations. Of course, all for a fee. Continue reading
As outsourcing non-core activities including IT has become common, companies have started to look out for partners, who will perform core functions including finance. MyCFO claims to be the only company in India that provides CFO services to help high-growth firms meet their business goals.
“We have heard of 8-10 firms in the Indian market offering similar services but they are more individual consultants working together than institutions,” said S Venkataraman, director of MyCFO. Continue reading
Co-founder and Director, MyCFO
Cash flows can be the one of the strongest indicators of an e-commerce business’s success or failure.
Cash flow in simple terms is the difference in time between when you get paid and when you pay. The sector has been in the news and is seen as one of the fastest growing amongst new age industry sectors in the next decade. With significant foreign investments in the sector in the last three years alone, Continue reading
There has been huge expectations from all sides since the new Government has been sworn in. In a bid to reignite the economic engine and make it chug along at a faster pace, the Government is trying to bring in legislations that it thinks will positively impact foreign investor confidence. The recent buzz/speculation around FDI in e-commerce industry is one of the most discussed topics.
While the brick and mortar traders have been and will continue to oppose the move, since they believe that it is likely to cannibalise their business, what has come as a surprise is the opposition this proposed change in policy is facing from the Indian giants in the e-commerce business. Continue reading
While every CFO needs to undoubtedly spend time on strategic & tactical matters, it is also very important to pay attention to timely & accurate processing of vendor payables. Every CFO can, I am sure, recollect one or two or even more payment escalations that have come to either them or at times even the CEO of their company. What follows then is a frenzy of activity to find out which are the invoices pending, where are they lying currently, why were they not paid? More often than not there is a mad scramble to unearth the facts and respond promptly. Now, let’s imagine – what if we could at the click of a button see if invoices have been received for a vendor, view the actual invoice online (if received), Continue reading
Wealth Tree Partners, which runs the online CFO servicing business through MyCFO.in, is looking to raise capital from private equity funds next year, said a senior company official.
“We want to raise growth capital from a fund that has had experience of scaling services business and can help us expand. From next year, we want to start implementing our plans of offering specific products and industry vertical based services, for which we would require Continue reading