Current health check-up
Cashcow’s expert approach is to analyse the current financial health and prospects of the ‘opportunity’ though various ratio’s run over a proprietary score card. The report of the same, points to the current weakness and strengths. Understanding the value proposition that amalgamation would bring in the current market is the deal maker.
Long term Forecast & Budgeting
To evaluate opportunities and growth plans, it is necessary to prepare forecasts and budgets. These help us understand the business better and provide a stronger basis for deciding the strategy of the merger and acquisition companies to achieve its goals. Cashcow consulting provides the management team with valuable reports that act as input for product pricing, finance requirement for project execution and necessary capacity utilisation for break even. The team has done Techno Economic Viability (TEV) & Valuation for numerous mergers and acquisition companies and that forms the backbone for recommendations.
Raising finance for Acquisition
Size of the project determines whether existing reserves are sufficient or the methodology for raising term debt gets defined. Cashcow Consulting is equipped with a professional debt raising team with almost 25 years of experience amongst them. The team decides various modes of raising finance either through domestic or foreign currency based term loans or External Commercial Borrowing (ECB) from abroad, or through part cash and part shares swap. Basis fund flow analysis and long term forecasting the required structuring of the debt is undertaken to ensure better risk management for repayment. Term debt is always accompanied by enhancement in working capital.
Read more about working capital finance here.
Strategic Mergers and acquisitions
Every business owner, at some point of time, has to answer the below critical questions:- How to scale up a small business to a big one? or,
- How to grow the existing one at an accelerated pace into a position of dominance?
Every growing mergers and acquisition companies with surplus funds may look at expansion via an inorganic or organic route. Alternatively, backward or forward integration of the product lines can bring significant value to the organisation. Each growth strategy comes with its own risk and rewards. Mergers and acquisition companies that grow inorganically, can gain access to new markets, improved revenue streams and better technology, through successful mergers and acquisitions companies, but on the flip side the challenges of size-management & culture-blending need to be addressed too. Organically growing, on the other hand is more like gulping what can be chewed and that requires time and patience to nurture, flipside being the market and competition, not providing the comfort of time.
To make such critical decision Cashcow CFOs provide you with best insights and advisory. Our market presence & regular interaction within our strong network makes us continuously aware of unique opportunities that arise, we ascertain the value proposition basis SWOT, using available data.
Long term Forecast & Budgeting
To evaluate opportunities and growth plans, it is necessary to prepare forecasts and budgets in order to know about the cash credit and overdraft situation of the company. These help us understand the business better and provide a stronger basis for deciding the strategy of the company to achieve its goals. It is basis the above that the surplus long term funds available with the organisation at any point of time gets highlighted.
Analysis of the existing financial statements allows us to understand the manner in which a particular source of fund i.e cash credit and overdraft has been utilised by the organisation. Any diversion of the same needs to be corrected while completing the forecasting exercise. Cashcow consulting brings in tremendous experience in executing long term forecasts that corrects the wrongs of the past while incorporating the growth strategy that the company is going to embark on.
Raising working capital finance
Financial institution is every organisation’s partner in growth. Cashcow’s debt team, with an overall experience of over 25 years, is fully equipped to raise the working capital finance from the best of financial institutions in India or abroad. Our experience enables the best of possible structuring coupled with the best of financial terms from the respective institutions. The team has handled mandates in excess of INR 20 billion on raising working capital finance till date.
Raising Debt
The size of a project determines whether the existing reserves are sufficient or would it require raising long-term debt. Cashcow Consulting is equipped with professional team with almost 25 years of experience in debt-raising. The team has raised domestic and foreign currency term loans as well as External Commercial Borrowing (ECB) from abroad. Basis fund flow analysis and long term forecasting the required structuring of the debt is undertaken to ensure better risk management for repayment. Term debt is always accompanied by enhancement in working capital.
Cash Credit and Overdraft
Simply stated, working capital is the difference between current assets and current liabilities. Every entity with an intention to grow requires working capital to meet the entire range of short-term fund requirements such as cash credit and overdraft that arise within their day-to-day operations. It’s a measure of short-term liquidity and addresses the overall efficiency of the organisation.- Credit term to offer for sales orders
- Credit term to negotiate for purchases
- Assistance required from the financial institutions
- Decision pertaining to organisation’s team expansion or any capital expenditures
- Company’s growth rate and profitability
Current health check-up: Cashcow Consulting approach is to analyse the current financial health such as cash credit and overdraft of the company though various ratio’s run over a proprietary score card. The report of the same, points to the current weakness and strengths. This frames the short term strategy focused to address the same.
The above chart is a representation of ideal source and utilization of fund.
Existing capacity utilisation & optimisation
Many a times, capacity expansion decisions are taken without knowing the process bottlenecks that create the difference between the rated and utilised capacity. Cashcow Consulting’s capability to understand the process required to link, seamlessly communicate and data capture between production planning, order size, runtime of machines, layover time, consumption pattern for line manufacturing facility enables process based debottlenecking that addresses the difference between rated and utilised capacity to a large extent.
Capacity enhancement or Technological up-gradation and Budgeting
Budgeting and long term forecasting defines the challenge that the company is bound to face regarding project loan. Whether it merits capacity enhancement or technology up-gradation or both is the question which requires thorough analysis. Cashcow consulting provides the management team with valuable reports that act as input for product pricing, finance requirement for project execution and necessitated capacity utilisation for break-even. The team has done Techno Economic Viability (TEV) study for numerous industries and that forms the backbone for recommendations.
Raising Debt
As discussed above, debt is one of the major sources of project financing.The size of a project determines whether the existing reserves are sufficient or would it require raising project loan or long-term debt. Cashcow Consulting is equipped with professional team with almost 25 years of experience in debt-raising. The team has raised domestic and foreign currency term loans as well as External Commercial Borrowing (ECB) from abroad. Basis fund flow analysis and long term forecasting the required structuring of the debt is undertaken to ensure better risk management for repayment. Term debt is always accompanied by enhancement in working capital.
Read more about working capital finance hereIf required, we also assist you in raising capital through any other sources of project financing.
CFO Services
Cashcow CFO Services form an extension of the existing management team as a “Strategic partner” to enable them to focus on core competencies while providing the necessary financial and administrative support tailored to an affordable budget.
- Financial Health Check-up
- Outsourced CFO Services
- Financial and Operational Consulting
- Strategic Consulting
- Raising capital and its management
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Financial Health Check-up/ Preliminary Assessment
The first and foremost activity in outsourced CFO services, before we get any client on-board is their financial health check-up. This involves a combination of financial analytics and on-site walkthroughs.- Our Approach :
Our expert CFOs perform this financial health check-up through:
- Analysis of the historical financial statements and performance of the company.
- Performing a walkthrough of the operations of the present accounts and finance function.
- Quick audit of the operations at the point of production of goods/ delivery of services.
- Benefits of the approach :To chart a course to the desired destination, it is necessary to know your current position. Thus before we begin our CFO services assignment it is necessary to analyse the current standing of the company. This enables us to define a detailed a scope of services, tailored specifically to your needs and draft a timeframe to execute these.
Financial & Operational consultancy
Under outsourced CFO services, financial consultancy involves assisting the daily functioning of the finance function of the organisation. This includes:Finance function transformation
Our Approach
- Identification and evaluation of the existing practices in the finance function as against industry standard/ ideal practices, prioritising these changes and defining a detailed roadmap for the same.
- De-cluttering the unnecessary complexities in the finance function by visualising the ideal case scenarios and shaping the future state of the finance function.
- Combination of different roles for combining similar responsibilities in terms of efficiency, internal control, performance management and strategy definition.
Benefits of the approach
- Provides clarity of how a finance function supports the business operations in achieving the corporate business goals, no matter how lofty they may be, and the underlying key principles.
- Defining the expectations of stakeholders, external benchmarks and best practices in the industry enables comparison with the current performance. This comparison acts as a guide for roadmap to bridge these gaps.
- Defining the sequencing and prioritisation of the improvement efforts, required resources and appropriate measurements of the implementation ensures smooth transition in a time bound manner.
Situations demanding our assistance
- Uncertainty about the efficiency and reliability of the finance function and looking for assurance.
- Dissatisfaction among the users (mainly management) of the financial information and reports generated by the finance function w.r.t. quality, timing, restatements and financial management.
- Requirement of cost reduction in the finance function.
- Transformation of business strategy or restructuring requires the realignment of the finance function in sync with the transformational plan.
Financial transaction process optimisation
Our Approach
FTPO is more than mere capturing of the financial data and transactions; it involves the daily business activities which are fundamental for a finance department to be cost and time efficient and able to deliver high quality information. Our activities under this service include:- Analysis of the current information system (ERP) and its configurations.
- Reviewing the current accounting function against the industry benchmarks to identify the gaps to be filled.
- Redesigning and implementation of the operations and accounting processes to optimise ledger processing on an on-going basis.
- Defining segregation of duties, restriction of accesses and internal controls to optimise accounting transaction processing.
- Reviewing of system capacity to deliver business-defined objectives.
- Reporting on misalignment, including issues and corrective recommendations.
Benefits of the approach
- Optimising the accounting function w.r.t. reporting, accounts receivable/ payable, closure of books and other labour intensive reduces finance costs and the finance professionals can spend time on higher value responsibilities.
- FTPO and value chain automation gives the client a competitive advantage- the best implementer company has significant lower finance department costs than the average company.
- Accounting function automation also rationalises the human resources involved and enhances their productivity.
Situations demanding our assistance
- Decentralised operating model; lack of standardisation and multiple number of accounting systems.
- Difficulties in providing timely, accurate and meaningful financial and operating information at the end of each period.
- Weak infrastructure to support automation of the accounts processing function.
- Lack of segregation of duties, governance over data and manual/ poor controls.
- Heavy reliance on manual processing of data leading to higher chances of human errors/ frauds.
- No alignment of systems and data, complicating the consolidation of information across business units.
- No clear connection between reports and performance measures of transaction processes.
Treasury and working capital management
Our Approach
Turning around the working capital cycle of a company requires reviewing your organisation to identify and assess the potential optimisation of working capital needs in close collaboration with the management to include the commercial and operating perspective. It involves:- Analysis and detailed review of the different cycles pertaining to account receivable, account payable, inventory in order to identify and quantify potential cash flow improvement and forecast cash flow evolution.
- Debtor and vendor de-risking and better negotiations based on their financial data.
- Rationalisation of the levels of stock, debtor, creditors, cash and credit facilities as per the budgets based on company’s financial plans.
- Insurance against credit risk pertaining to receivables.
Benefits of the approach
- Proactive receivable management with reduced risks of bad debts.
- Optimising the operational structure to free up funds for further investments or reducing debt, thereby saving finance costs.
- Identification and monitoring the working capital management risks.
- Improving efficiency of the order-to-cash and purchase-to-pay processes leading to additional cost benefits.
- Increasing flexibility by simplifying the supply chain and streamlining business practices.
- Boosting the confidence of stakeholders, thanks to smooth flow of daily operations due to an improved working capital structure.
Situations demanding our assistance
- Working capital stuck in the form of unwanted inventory pile up or high levels of debtor.
- Need to regularly infuse promoters capital or additional funding for maintaining the continuity of daily operations in the organisation.
- Erroneous diversion of short term funds for long term/ capital purposes leading to working capital crunch.
- Working capital management for scaling up operations/ future projects.
- Need for sustainable rationalisation of working capital.
- Cash flow volatility and working capital forecasting.
Integrated Performance management
Our Approach
The objective of IPM is to deliver a framework to facilitate the translation of strategic objectives into operational results and create value for the organisation. This is done through:- Defining an elaborate organisational hierarchy to fix reporting and accountability of personnel across the organisation.
- Defining extensive KPIs, KRAs and SOPs for all the resources of the organisation.
- Instituting a system of rewards and learning to encourage adherence to the formal code of conduct.
- Formalising the operations in the organisation to enable appraisal and holding accountability.
- Improving the placement of manpower based on their relevant skillset and experience to improve efficiencies.
- Rationalisation of human resources across the organisation to address any understaffing or overstaffing issues.
Benefits of the approach
- Improved flow of communication of the strategy to the operational levels in the organisation through the organisational hierarchy.
- Focus on value-adding initiatives with leading indicators providing early insight into areas of challenge or opportunities.
- Alignment of rewards, learning and development with the organisational strategy boosts confidence in staff and motivates them.
- Improved identification of the areas of improvement and performance linked appraisal ensures continuous development of the human resources.
- IPM provides a robust platform of control and security within the organisation and leads to mitigation of enterprise risks.
Situations demanding our assistance
- Forecasting and budgeting have become a regular and mechanical activity, than being a dynamic tool to deploy and align the resources as per the strategy.
- The organisation is failing to align its strategy with the long term planning by the management.
- KPIs or SOPs are non-existent or are unrealistic.
- It is difficult to hold responsibility and accountability of the workforce.
Credit assessment and advisory
Our Approach
- Understanding and analysing the existing finance mechanism and debt arrangements vis-à-vis the credibility of the company. (The credit assessment of the company is based on historical performance, financials and credit rating etc. of the company).
- Assessing the proposals from lenders and advising on the best option based on covenants, flexibility, suitability and cost.
- Assisting investment documentation and paper work that aim at attracting investors and lenders and facilitating negotiations with them.
- Rationalisation of the credit rating and guarantees and collaterals asked by the bank.
- Access to international financing sources and assistance in structuring and arranging highly customised financial solutions.
Benefits of the approach
- Ensuring the right mix of funding options that match the company’s strategy and requirements.
- Facilitating procurement of low-cost project funding (thanks to our decades of experience and access to the comprehensive network of investors and lenders).
- Ensuring timely disbursement of funds/ sanctioning of limits by regular follow ups with the lender and leveraging on our experience and network.
- Ensuring only adequate covenants, reasonable warranties and collaterals are agreed to with the lender.
- Helping to provide stable, sufficient and adequate funding sources to finance growth or investment projects over the coming years.
Situations demanding our assistance
- Evaluation of existing or new debt or financing options is needed.
- Optimisation of finance structure from the tax, risk and cost perspective.
- Significant part of your debt will mature within a couple of years.
- (Re)negotiation of credit facilities is required due to expansion/ curtailment of operations.
- Need of temporary or additional working capital liquid funds to support operations.
- Shareholder value is limited due to inefficiencies in the deployment of the funds or the existing BS structure.
Cost containment and expense management
Our Approach
- Preparation of detailed budgets based on an elaborate analysis of all the expenses and incomes in the organisation.
- Rationalisation of each head of expense by performing a walkthrough of the related processes with an aim to promote efficiency thereby reducing costs or improving productivity.
- Regular monitoring of the expense management plan and variance analysis with the budgets to facilitate prompt corrective actions.
- Implementing dynamic pricing mechanism for work orders taking into consideration any addition/deletion of overheads.
Benefits of the approach
- Improved competency of the company in the industry, leaving more room to tweak product prices or enjoy better margins at existing price levels.
- Boosting confidence of the stakeholders in relation to product pricing and expected margins/ profitability.
- Effective planning due to realistic, dynamic and achievable budgets.
- Enhanced value creation and progressive growth for all the stakeholders of the company.
Situations demanding our assistance
- Regular changes in the cost structure of a product due to fluctuation of product prices, which are not effectively covered in the existing pricing mechanism.
- Unexpected losses for a financial year where management has been confident about profits.
- Continuous failure to achieve targets and unrealistic budgets at the commencement of the year.
- Inability of the company to match the prices of the industry leading to cash burns and bleeding books in a moderate to low competitive environment.
Strategic Consultancy
Today’s competitive business environment requires an organisation to have a robust strategy that differentiates it and strengthens its market position. Such strategy can involve modification of the production process, adoption of new technology, understanding consumer behaviour and undertaking significant risks. But it is necessary to devise a strategy which brings about the right transformation while mitigating the related business risks.- Our Approach :
Our expert CFOs perform this financial health check-up through:- Analysing the trends in the industry and performing peer comparison for the client, to identify opportunities and risks.
- Understanding the short and long term goals of the management, their vision and plans.
- Preparation of detailed business expansion strategy which supports management’s vision and a structured approach to achieve the same.
- Evaluating acquisition opportunities in terms of the resultant synergies and facilitating the inorganic growth plans.
- Providing the management strategic business directions, sharing insights and aligning the growth strategy to operations.
- Benefits of the approach :
- Assessment of the current standing and potential of the organisation.
- Clarity of approach and detailed business plans, backed by financial data, boosts the confidence of the management in decision making.
- Smooth transition of the company undergoing amalgamation or restructuring.
- Helps a company to actively face the competition and the proactive approach of CFOs mitigates the market risks.
- Situations demanding our assistance :
- Operations of the organisation are not in sync with the management’s vision.
- Management needs expert insights to support their long term plans and advice regarding the achievability of the same.
- The management plans to go public or expand substantially, organically or inorganically, in couple of years.
Our Approach
- Evaluation of existing systems : Our systems advisor and CFO will evaluate the sufficiency, effectiveness and robustness of your current financial systems against the company’s objectives. They will determine whether the existing systems and human resources are capable of capturing your current level of transactions, if yes, how effectively do they handle it. After the evaluation we will decide whether the existing systems are to be replaced or modified to fulfil the objectives of the organisation.
- Modifications to the existing systems : In case the existing systems are sufficient but require some modification/ customisation we will engage with the technical team to bring out the requisite changes. Enabling the relevant modules of the financial system to mirror the operations and transactions at the ground level.
- Replacement of the existing system : In case the existing systems are required to be replaced in entirety, we would evaluate alternatives based on your requirements and suitability. This involves:
- Selection of ERP and vendor that best suits your business and is capable of effectively handling the operations of the organisation; also keeping in mind its capability to adapt for future expansions.
- Getting the ERP modified (if required) to capture all the relevant details as desired by our CFO and generate customised reports.
- Providing necessary support required during the roll out and ensuring timely transition.
- Organising training sessions for the finance personnel to enable them to effectively operate the ERP.
- Ensuring access restrictions for users, setting transaction thresholds and implementing a system of approvals and authorisations.
- Implementing a maker-checker model by clearly segregating duties and accesses.
- Incorporating the relevant organisational policies pertaining to payroll, expenses, allowances, commissions etc. in the ERP systems by liaising with the administration and HR departments.
- Setting up a robust MIS to generate customised and regular reports, supported with necessary annexures and action buttons.
Benefits of our approach
- The evaluation of your existing systems will help us to determine its gaps and lacunae. This helps us to have a better understanding of your requirements to enable vendor selection and customisation.
- Enhanced functionality : Getting necessary modifications/ customisation ensures reduction of manual intervention, electronic processing of all transactions, capturing of necessary details to generate meaningful reports.
- Handling staff resistance appropriately by apprising them of the benefits and sensitising them to ensure smooth transition of systems.
- Mirroring the flow of operations through ERP promotes transparency and accountability.
- Improving utility of systems and efficiency of human resources by defining their KRAs and segregation of duties.
- Generation of error free reports and boosting confidence of the users of data through the maker checker model.
- Reducing the chances of fraud and errors by embedding the policy restrictions in the software.
- Robust MIS ensures regular appraisal of summary of operations to the management and facilitating sound decision making.
Situations demanding our assistance
- Decentralised accounting/ billing leading to substantial loss of control over the finance function.
- Redundancy of operations and overstaffed/understaffed departments with no clear segregation of duties and responsibilities.
- Inability to measure the efficiency of the staff engaged in data input and accounts function, alongside others.
- Underutilisation of the existing systems (like using selective modules of ERP, bypassing accesses and authorisation requirements as per the comfort of staff etc.)
- Usage of different software for capturing data across departments and making unnecessary efforts to collate the same.
- Lack of necessary controls over allowances, sanctions and other expenses leaving room for frauds and errors.
Financial Health Check-up
Often management may look out for getting an analysis of the financials and historical performance of the company to understand the strength, weaknesses and opportunities. This involves application of ratio analysis, statistical techniques and may require on-site walkthroughs. This activity is a pre-requisite for CFO services.
Forecasts & Budgeting
To evaluate the opportunities and growth plans, it is necessary to prepare forecasts and budgets. These help us understand the business better and provide a stronger basis for deciding the strategy of the company to achieve its goals.
The main objective of this activity is to understand how our growth plan would fare in reality, assuming past trends continue, adjusted to any additional information or update available. The more detailed and periodic such statements are, the better the insights are, for intelligent decision making. Variance analysis of past budgets give us how accurate our estimates were vis-à-vis our actual performance, the good decisions and the bad ones. It provides a basis for better future planning. Budgets and forecasts also give us a benchmark on the basis of past records for future performance and efficiency. If you are currently facing hiccups in your growth journey w.r.t. to uncontrolled costs, planning & budgeting, regular fund crunch or lower than expected profits, our CFOs can help. We are experienced in multiple industries to craft unique solutionsCapital Structure
With a rich experience in the debt advisory and capital restructuring strategies, the debt vertical at Cashcow stands high. We can advise you regarding the best capital mix, modes of finance and its disposition and provide you with unique funding solutions, thanks to our vast network and reach in the industry.
Crafting Long Term Strategy
The management may have plans for growth of their business in terms of achieving higher sales, geographical expansion, product line diversification, merger & acquisition, forward or backward integration or going public, which may require an expert’s opinion or guidance. Cashcow CFOs are trained and experienced to handle such situations and evaluate the viability of such plans.
By providing you better insights backed by financial data, we can help you to take informed and better decision. We can also help you in devising better strategies for achieving success in your growth plans.