Do you think your business has reached a point in its lifecycle where you think an infusion of private equity will take it to the next level? If your answer is in the affirmative, you need to be aware of the critical success factors that would make such a PE investment viable for you and your business. We may think that our business could not go wrong, our white papers and business plans are perfect to the T. However all entrepreneurs need to think through their value proposition that they want to present to the various PE firms they plan to meet during the road show and essentially think from the point of view of the Private Equity players. What would be the due diligence points that most PE firms focus on while evaluating a potential deal? I think one needs to think through these critical... Read More →

Inflation: There are many technical definitions about Inflation. In simple terms it represents increase in cost of products and services over time. Increase in cost also directly results in lower buying power and is therefore the X factor that drives down value of money. I have been reading newspapers and listening to expert interviews that are filled with a lot of technical jargon on the need for reforms & RBI/Central Bank’s intervention to control inflation, and how economies would face problems as a result of inflation, etc. etc. etc. But what does this mean to us? There are lots of matters that happen outside of our work-life environment and one wonders if this is something that we have to be concerned about, and if so do we need to lose sleep over it? That’s when I started... Read More →

In Part I, we have discussed about some real life examples from SME’s across multiple functions like Accounting Systems, Compliances, and Cash Flow Forecasting. Following on the Part I examples, we commence with Part II where some more examples on functions like Receivables Management, Cost Management, Fund Raising and Finance Reporting, will be dwelt upon. RECEIVABLES MANAGEMENT It is surprising to see that many a times SME’s chase banks for Working Capital / OD limits, while running huge receivables from clients. Infact, there are some large companies who actually fund their working capital needs by running credits from smaller vendors. SME’s tend to run over dues and receivables from their client companies, in the rush to keep clients happy. Following are few areas SME’s should do,... Read More →

Ever wondered how some companies are able to raise substantial debt & equity funds, and grow organically as well as inorganically, rapidly? Ever wondered how some organizations are able to manage crisis far better than the industry average, when the going gets tough? The answer to that is having a good CFO, which makes a lot of difference. Note however that a CFO should not be confused with Head of Accounts. SME’s usually ignore the finance & accounting function, which is left for the friendly CA to manage books and more so taxes, than proactive financial reporting to support key business decisions. A CFO today leads every other function in an organization, alongside the CEO, shouldering equal responsibility in the success of the company. A CFO today not only leads the accounting... Read More →

This is a fairly popular Hindi phrase that is used when implying to someone that you are ‘trapped’. For those who are not familiar with Abhimanyu, and this phrase, let me give some background: Abhimanyu was the son of Arjun and Subhadra, who was half-sister of Lord Krishna. As an unborn child in his mother’s womb, Abhimanyu learned the knowledge of entering the dangerous and nearly impenetrable Chakravyuh from Arjun, his father. The story goes that Abhimanyu overheard Arjun talking about this with his mother Subhadra from the womb. Arjun explained the technique of cracking & entering Chakravyuh but by the time Arjun could explain how to come out of it, his mother Subhadra fell asleep and Abhimanyu could not learn about it. In this modern world, I correlate that to (with some... Read More →

Online banking is the practice of handling all the bank transactions through internet. We are blessed with such unique technologies where all our works gets completed within seconds. Internet Banking is one of such technologies. With the help of internet banking, we can deposit and withdraw amount our self directly to our account , make all kinds of bill payments, tax payments etc. We can pay our bills like telephone, mobile, credit cards etc. through internet just by once registering with our bank. After making registration, we can pay our bills as and when required. Internet banking allow us to access our account, so that we can know instantly which amount is credited or debited in our bank account which in turn will help to solve our issues if any. It is an easier way to transfer amount... Read More →

A simple way to control your money is to have a proper budget planning so that money no longer controls you. Whether you are an individual or a company, proper planning of your budgetary requirement will certainly make for less sleepless nights. An easy way to plan your budget is to keep record of your expenditure against your earnings. The day your monetary output surpasses the input is the day when the future starts to look worrisome. First thing you need to do is to make an exhaustive list  of all your expenses and subsequent budgetary allocations. This list should even include expenses which might otherwise seem trivial, like  tea /coffee bills, daily commuting cost, food expense, etc. Keep a close record of all your expenses for at least a month. Don’t need to carry a paper & a... Read More →

The tiny, yet important country of Ireland, situated in the British Isles, is in the midst of a debt crisis quite remnant of the US and British subprime entanglement. The worrying part is that a country whose annual economic throughput is not even 1/50th that of the United States is facing a terrible state of financial flux, whose ramifications could be global in reach, if there is no immediate addressal of the ballooning predicament by the private investors and EU. In today’s globally integrated world, where financial institutions and banks are linked like the neurons of healthy human brain, the island nation’s economic woes have made the investors very edgy and they are already clamoring with global governments for financial debt restructuring and relief packages for Ireland. Ireland... Read More →

Cash flow Management is very crucial for the smooth running of any Business , be it a Trading and Distribution company having short term issues or Manufacturing organisations having  to take small/medium/long term decisions or a Corporate executing Turnkey/Infrastructure  Projects and has to invest in Capital intensive Machinery and block funds in Receivables and Inventories. Components of Cash flow model should cover Day – to – day expenses Committed periodical/non periodical expenses for services procured Payment for the purchases of Material /Capital Assets /Major repairs Repayment of Bank loans , Term Borrowings ,Buyers Credits Expected collection of dues from customers/clients Advances for new contracts Collection of old Dues/contractual claims Misc surprises The success of the... Read More →

Unfavourable currency (Fx- Foreign Exchange) fluctuations eat into our margins while favourable Fx moves boost them. The long term pricing strategy of the company has to factor in these negative fluctuations to prevent non digestible margins squeezes and reduced profits. What can we do to mitigate these Fx risks? In any midsized or large company, the number of financial transactions taking place every day is vast. Each of these transactions can take place in any number of currencies, across borders and between countries. The value of currencies changes continuously and this causes both positive and negative effects on the operating margins. Mitigating the negative effects is a high priority and one which can be partly done through raising prices of products and services. Generally, global companies... Read More →