“Sales is Vanity but Profit is Sanity while Cash is Reality”
Finance has many important roles
- The first one is being enabler of business. Finance is the medium which facilitates all business transactions. Finance works as valuable business partner in discharging this role.
- Secondly, it provides a common unit of measure. Therefore, all operations from procurement, manufacturing to sales, service revenues are recorded in money terms as common unit of measure. Profitability and strength of Balance sheet are important foundations for any sound business.
- Thirdly, finance also works as regulatory gate keeper. Be it in terms of compliance, governance. It works in areas of statutory matters as well as internal financial controls. Brakes are as important as accelerator as in role one above.
Challenges In Finance
- Top line growth resulting into meagre profitable growth
- Increase in business resulting into inadequate cash flow
- Balancing between expansion Vs working capital
- Excessive risk of initiating new opportunities without adequate analysis
- Lack of alignment between Strategy, Annual Goals and Accounting information leading to impact on operating margin
- Low ownership and accountability due to lack of budgeting process
- Not focussing on Value creation
- Not enough focus on Governance yielding to major risks
- Strong track record of transforming businesses
- Extensive & diverse global industry experience
- Customized solutions with flexible models
- Execution ownership with extensive handholding
- Functional Mentoring
- Add value through collaborative & synergistic approach
It is important for any business to consider that it comes into existence by active cooperation of its key stakeholders. So, ensuring win-win relationship with key stakeholders and creating value for all in that process is the way for long term value creation. This is specially important for newly listed companies.
It is said that “Sales is Vanity but Profit is Sanity”. In the competitive market, it is experienced by many that attention is paid to increasing topline but many times bottom line fails to keep pace with that. This, in turn, becomes a limitation to further growth. By proper analysis of various factors contributing to profitability one can ensure “Profitable Growth” and not just growth at any cost
“Cash is Reality” is third part of the statement referred earlier. Unless one has smooth cash flow, management of business could e caught in rough weather. This requires a good finance acumen on part of key players in the organisation who are responsible for cash in and cash out.
Project is very long term investment decision. Therefore, its feasibility analysis needs to be robust to consider long term business projections, financials, risk analysis and what-if analysis. With a well rounded business expertise available in Leap2excel Consulting, we are well equipped to work in this area for clients
Not only corporate governance is demanded by SEBI and investors, it makes eminent business sense as well. We could work with clients in setting up good Corporate Governance practices
Execution is perhaps more important than the strategy. Annual budgeting exercise needs to serve as uniting exercise for all important functions to work coherently towards strategy. MIS needs to be tailor made to guide all whether the initiatives are on track as reflected in financials.
Financial results provide valuable inputs if analysed systematically. These can be used for mid-course corrections to achieve long term business goals. We offer to analyse quarterly results with senior management teams to help in future actions
Leap2Excel Consulting has built business simulation games for inculcating business acumen thru finance acumen. These are built for Indian companies and MNC’s. Moreover, they can be customised to maximise learning for the client organisation. At a higher level the games would cover long term decision making and strategy.
Many times in M&A transactions, potential buyers need independent assurance or reporting on strengths and weaknesses of a business that is subject of transaction. Leap2Excel Consulting having direct experience of all important business functions such as Strategy, Operations, Sales and Marketing, HR, Finance and Business excellence is well poised to conduct business due diligence. Partners have experience of having gone thru such exercises many times in their career could bring those experiences to play in such assignments.
Leap2Excel partner has experience as a CFO in major listed companies over a decade and could mentor CFO’s / emerging CFO’s in organisations