The one key element that has changed the way of doing business is the flow of information. The new-age CFO must now realise that he is no longer expected to linger in the background and surface every time the results are to be announced.
As the one person in the organisation who has intimate knowledge of both the past performance and the expected future growth, it becomes his responsibility not only to steer the company towards a better future but also be able to provide a transparent, big picture view of the future, to internal stakeholders, customers and investors. Continue reading →
A start up is much like the car that all driving schools have with two sets of controls, one with the promoter and the other with the CFO. It is upto the CFO then to determine whether and when to accelerate and when to apply the brakes on the fast growing start up’s growth. Here’s a look at some of the challenges that the CFOs are likely to face in their roles in a start up.
In a startup, the CFO is supposed to play the role of the trusted confidante of the entrepreneur, who might have opposing views to the promoter. A key challenge for the CFO is to walk the tightrope between his role and mindset, where one is telling him to tread cautiously and the other urging him to take risks. He also needs to be able to convince the promoter that sometimes divergent views are key to arriving at the company’s shared goal in the most effective manner. Continue reading →
Our client Fulex is in the business of developing fuel efficiency solutions for the Genset manufacturers. This involves carrying out R&D on the technological and commercial feasibility of the products and, once the feasibility is demonstrated, developing and manufacturing these products. The Company is in a high growth phase with a need for maintaining high level of working capital to sustain the growth, in addition to capital requirement to fund expansion.
The objective of the budget exercise was
(a) to develop 5 / 10 year plans, Annual Operating Plan or Annual Budgets with monthly / quarterly break-ups at a departmental and segment level
(b) Determine sales targets to the sales team, broken by products, geographies, customer segments etc.
(c) Determine P&L position and cash/working capital requirements at various levels of sales
(d) Determine the amount of capital to be infused to support ongoing operations and expansion plans
(e) Planning for manpower needs
(f) Expense control, by allotting expense budgets to departments
(g) Determining profitability by product, geography, customer segments etc
(h) Exploring feasibility of expansion plans with metrics such ROI and IRR
(i) Scenario analysis, Sensitivity analysis and “what-if” analysis through modification of the assumptions.