Commodityco is a leading company in the trading of pulses and has recently ventured into processing. An overseas Joint Venture (JV) partner has invested in Commodityco 3 years back. The business has been doubling over the last 3-4 years and Commodityco is currently at sales aggregating to INR 2,500 Crores. The aggressive growth was not backed by implementation of robust Finance and IT systems, with Tally being used till about 12 months back. The company is Family owned and the second generation promoter felt the need to support the growth by instituting better quality controls, systems and a performance driven culture which had largely been ‘personal’ with the promoter and ‘informal’.
Challenges for MyCFO
Some of the key challenges faced by the MyCFO team was (a) getting a good grasp of the business (dynamic business with exposure to large volumes, forex and commodity price exposures, absence of written contracts), unavailability of data relating to the past (largely in key people’s ‘memories’), competency of the existing team and to be able to connect different silos where information was hitherto residing.
MyCFO’s mandate here was to play the role of an ongoing CFO for Commodityco. Commodityco and MyCFO felt the need to implement an ERP system which would help address issues on data integrity and also integration of key functions across the organization including processing locations, branches etc. The implementation of the ERP was completed in 7 months, post which the budget exercise was activated. This took MyCFO and the company another 45 days to get a ‘first draft’ of the proposed budget. The budget tracked the following parameters (a) Sales and Purchases: By Business Unit, By Commodity and By Trader (b) Processing Plant: Capacity utilization, production units and by item/commodity (C) Gross Margins: By Commodity, By Business Unit and By trader (d) Overheads and (e) Cost per ton. The budget committee in this case largely comprised of the promoters and the MyCFO team with involvement of departments on a need basis. The budget draft underwent 2 revisions post which this was rolled out/finalized.
How the client benefitted
The company had undertaken a budget exercise for the first time in its lifetime. The budgeting exercise was combined with the KPI exercise for the company. The concept of tracking performance against set targets/budgets was communicated and a tracking mechanism (budgets vsactuals) has been instituted on a monthly basis, providing visibility not just to the promoters but also to the JV partner.
Food & Beverage is a food services and a restaurant company operating stores across various large brands like KFC, Pizza Hut and Delifrance. It is one of the two key franchisees in India for an American fast food operator of Taco Bell, KFC, Pizza Hut and Wingstreet. SF Foods has taken over around 280 outlets in India & Sri lanka. SF today is company having more than 9000 people and turnover of around 700 Crores. Post acquisition, SF is operating and having development rights in 15 states of India
Key Expectations from MyCFOO
Identify & study the existing processes of the franchisees, recommend and implement best practices
Assist the client in pre-deal closure and obtaining/transfer all the operating licenses to the new company
Assistance in getting all statutory Registrations at Pan India Level
Collating required data from different ERPs and IT Systems
Significant increase in business & financial reporting request from the Investors & promoters
Implemented best processes & comprehensive SOP documents and Developed Approval Hierarchies, Chart of Accounts, vendor master, location master, etc.
Set up entire Banking & Treasury, Finalized the vendor Invoice processing ,AR processing, Project Accounting & FA management
Assisted in implementing various automation & customization in ERP system for Accurate & timely financial & management reporting
Built operating Budget for 2016-17 to track actuals vs. budgeted
How the client benefited
Acquired operating licenses and statutory Registrations at PAN India level —Started Pan India level operation of Initial 100 stores within 2 months of our engagement Implementation of best practices & integrated IT systems Positive EBITA post consolidation of the business Manage the entire volume of Finance function and operation in spite of unavailability of clients finance team Assistance in taking business decision through robotics MIS ,Dash Boards & BI tools
Pharma Group is a global leader in excipient solutions. The Group develops, produces, and markets excipeints for oral solid dose and dry powder inhalation formulations. The Group’s customers are leading pharmaceutical companies. The Group had taken over a closely held Indian company 2 years back and needed MyCFO to manage the Post merger acquisition as their India CFO.
MyCFO’s role was to ensure correct, accurate, complete and timely review of day to day accounting based on accounting conventions and principles in line with Indian GAAP and IFRS, addressing issues that came up as part of the due diligence process, Develop and report MIS to the India CEO, Complete timely monthly reporting to Group CFO, ensure local compliances, Implement internal controls in line with Group policy, Assist in the implementation of the Group ERP (Navision), Participation in fortnightly review India CEO and the Group CFOs office, authorizing and tracking of expenses, liaise with the auditors for accounts finalization, setting the India budgets, managing and forecasting future cash flows, getting involved in monthly review meetings with the India CEO and the Group CFO and measuring business performance by setting up profit center accounting and reporting. The role comes with accountability to deliver results that an in house Controller/CFO would take on had there been one.
How the client benefitted
MyCFO’s involvement resulted in clean up of accounting and compliance related legacy issues, reduced monthly reporting time from 8 weeks to 1 week, implementation of an ERP system within 6 months from the start date, discontinuation of non – profitable products by developing robust costing systems and in reduction of debtors collection cycle from 120 days to less than 45 days.
IndFrag is an 80 year old, $ 100mn Indian group and the industry leader in industrial fragrances and flavours. The company is based in Mumbai having manufacturing capacities in Mumbai, Gujarat and Netherlands.
Our MyCFO role
MyCFO assisted the company in a comprehensive change management project from a Promoter managed to a Professionally managed company. MyCFO was involved preparation of MIS reports, preparation of financial statements under local GAAP, analysis of product and business profitability, project managing the implementation of an ERP, preparing the data room for potential PE partners.
How our client benefited
Under the Promoter management, MyCFO helped in providing better visibility into the operating parameters of the business and by playing the role of an Interim CFO. The company benefited from Business Process Improvement measures and streamlining of Finance procedures. MyCFO assistance helped the company client prepare well for investor due diligence. MyCFO helped in the Promoters to obtain a good valuation from PE investors, by building a credible investment case. MyCFO helped in the smooth transition in the management of the Company. Post transition, MyCFO continues to be involved in the areas of budgeting, performance measurement, Business Intelligence, helping the new professional management and investors to move the company to the next level of growth.