Ask any start-up Founder and CEO how big her company is and she is bound to rattle off revenue, cash-flows and projected profits. But ask her if her founding team includes a finance expert, chances are that the answer is ‘No’.
“Given the emphasis on finance, valuations and million-dollar dreams that entrepreneurs set out with, it is ironical that too few start-ups actually have finance as an in-house function,” said Sachin Sancheti, Chief Technology Officer and Founder at the 18-month old cloud-service provider Scalable Solutions. “I have not yet met or heard of a technology start-up that has a finance expert as one of the co-founders.” This, he attributes to the fact that business ideas, which go on to become business offerings, typically emerge from technologists and business folk. “Before we start out on our own, we tend to meet with and ideate with those like ourselves in technology or project management teams. Rarely does a finance person figure in those sessions.” Mr, Sancheti got lucky, when a relative, a qualified accountant, was willing to bet his all on Scalable and wanted to be part of the founding team. “You need a co-founder you trust and with a close relative, trust comes first.” Continue reading →
With increasing complexity in the business environment, CFOs need to work closely with key stakeholders in drawing up risk mitigation plans
Every finance department and CFO aspires that the function that he/she leads adds value to the business. Finance and the role of a CFO in being a driver rather than just being a record keeper is now a part of virtually every finance transformation session. Most of us are aware of the role of a CFO in being able to contribute to the company’s strategy, growth, work with cross functional teams, manage and lead board discussions and investor relations and build robust systems. While these are part of the daily discourse on the role of a CFO and also a part of their job descriptions, there are areas where CFOs and finance teams are doing interesting work to improve the effectiveness of the finance function and contribute to the business. Here are my three picks: Continue reading →
Come January and many companies will commence the annual ritual of the Financial Budget. Last year Budget will be dusted off, actual year-to-date performance will be reviewed, next year performance target will be demanded from business heads, numbers will be negotiated, financial planning and analysis (FP&A) folks will crunch and consolidate and voila, the EY 16-17 will be ready!
Certainly, this is how the ‘classical’ budgeting process works. But is this how companies now do their budget today? A large number of companies no longer follow this approach and even if they do, the Budget is no longer the ‘Holy Grail’ of annual planning.
Lakshminarayanan Hariharan, PMP Vice President at MyCFO India
It is an assumption that implementation and use of technology – hardware, software and tools – will result in fueling growth to business. Growth must not be merely defined as top-line growth. It should be inclusive of efficient supply-chain management for inventory control, cash management, fast-tracking period closing and performance management.
The leverage of technology is very diverse from industry to industry. Aerospace, medical, digital, media, research & development etc. witness higher adoption of technology to provide an edge for companies. On the other hand, companies in retail, manufacturing and BFSI segments leverage technology for efficiencies in business process and delivering quality customer services.
There is a conscious effort across industries to eliminate or limit the amount of in-person services that the organization used to provide and instead the customer is being provided the platform to use / source the products or services, get data and analytic’s , and provide intelligence for decisions, all through the leverage of technology. The following graph gives an industry-wise representation of IT spending as a percentage to revenue, providing an insight on the extent of IT leverage across the board. Continue reading →
“The company benefits immensely if the finance and human resource functions are in accord”
The HR Head and the CFO are the respective leaders of the ‘soft’ and ‘hard’ domains in a company. The former deals with people,culture, and behaviour – the soft side;the latter with data, facts, and money – the hard side. While these may look like completely divergent functions, for a company’s success, they need to be in harmony.Most crucial decisions are usually taken collectively, often with unanimous feedback from both the soft and the hard sides of businesses. Continue reading →
Karthik Narayanan, Vice President – Client Delivery
If there has been a radical change in any role in the corporate world it has been that of a CFO. From the traditional Munimji/Bade Babu, the CFO in corporate world has been the ultimate game changer.
From being the conscience keeper to strategizing growth, networking with the who’s who of the finance world, developing the internal team, managing the Board, managing the Shareholders, managing complex tax issues, ensuring absolute transparency in finance & accounts, the list is endless with respect to matters in which the new age CFO is involved. The core role being the same, the additional ones change depending upon the industry as well as the stage at which a company is at i.e. Start up, High Growth, Mature steady Business, Cash crunched business etc.
It is very important for a company that is looking to hire a CFO to understand the need as well as the intricacies of the role of a CFO before they hire one. Sounds easy ah? It is easier said than done. Here are some aspects, which I believe are non- negotiable while hiring your CFO. Continue reading →
Narayan Krishnaswamy, Vice President – Client Delivery
It is late in the night, the lights in one section of the office are on (no prizes for guessing which function this is), the CFO and his team are busy with the year end closure, getting ready for audits and there is also a budget exercise looming ahead.Budgeting is an annual feature in every company’s itinerary and is quite an elaborate process if its done well. Most large organizations have robust processes and better quality talent to be able to pull this off with relative ease. The issue lies with mid corporate organizations who are neither too large to have the processes and people nor too small to ignore this, especially those who have an investor on board or where the accountability rests with the board. Having seen many such organizations, I have put together my thoughts on how can organizations get the best out of a budgeting exercise. This is in no way comprehensive nor do I claim to be a ‘guru’, this is purely experiential and has come from my exposure of having dealt with such companies. Continue reading →
#MakeYourFuture was one of our endeavours to offer a peek to CAs, budding CAs and aspiring CAs into the job market. It helped them understand opportunities and challenges in making career and taking a shift. These quick snippets will give you an idea on what happened there.
Mr. Vijay Krishnamurthy, Executive Director & Lead CFO Partner, MyCFO
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 →
Mr. Murli R, Vice President – Client Delivery, MyCFO
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 →