A Smart And Interactive Dashboard Solution For CEOs and CFOs
Companies at all stages of their evolution need a strategic financial brain to steer it clear from the stormy waters. This is more so in the early stage companies. They crave for a sharp analytical mind to help them out in fund-raising, budgeting, financial reporting, cash flow management and ensuring compliance.
It has been observed that more than 40% early-stage businesses shut down due to financial in-discipline. Of course, only less than 20% startup founders believe that they can afford a full-time CFO in their organization. The truth is that the need for a strategic financial “brain” as part of your early-stage team is more imperative than ever. The CFO or Finance Head will ensure that the company keeps running full-steam and thereby help the CEO or the Promoter to focus on strategy to fuel the company to further growth, without being unsure – financially!
If you are a start – up or a small and growing company, hiring a Fulltime CFO would in most cases be cost prohibitive. How do you reconcile to this situation? There is an ever increasing need to make financially challenged companies aware about the growing phenomena of Virtual CFO or Shared CFO services where you can Hire a CFO, at a fraction of the cost that it would take to recruit a Fulltime CFO.
Worry not! SuperCFO has just the right solution for you in the form of a Virtual CFO or a Shared CFO.
Yes – A Virtual CFO. Someone who will never be a liability on your payroll, but always an asset for you and your company. The SuperCFO Virtual CFO’s involvement with your company is calibrated just to the right extent to ensure that there is no bleeding of unnecessary finances for your company. And what more……our Shared CFO brings great experience and skill to your existing Finance and Accounts team at a sharp cost; just when your company needs it the most. So go ahead and Hire a CFO from SuperCFO.
Plug those leakages to achieve cost efficiency and savings.
1. Rentals: Did you measure the office you took on rent?
Did you know that: You could have negotiated good rate per sq. feet, but what if the landlord is charging you for more area than what the actual office space is?
2. Manpower Cost: Do you evaluate various activities performed by your staff to check if there is any scope for improving efficiency, or eliminating unwanted tasks or automating mechanical processes?
Did you know that: By undertaking Time & Motion study, by evaluating in detail what each one does the whole day, by implementing certain productivity tools and/or by realigning job responsibilities, you could improve employee productivity multi-folds, thereby eliminating the need to hire more and containing manpower costs? Such measures also help in improving accuracy levels.
3. Cafeteria Services: Have you ever compared your guest/employee attendance vs. the plate count provided by your cafeteria services provider?
Did you know that: While you may have negotiated best per plate rate with your cafeteria services provider, you may be charged for unwanted extra plates?
4. Internet Cost: Are you paying for internet for allowing free movie downloads to your employees during office hours?
Did you know that: With smart internet usage policy, where you could permit personal use of internet after office hours, you could free up a lot of internet traffic, thereby reducing internet bandwidth requirement and corresponding cost.
5. Car Hire / Conveyance Cost: A lot of employee friendly companies provide door-to-door transportation services to their employees. Are you checking if the car hire company is taking the best route from “distance travelled” perspective OR is he charging you based on the longest route?
Did you know that: There have also been instances of employees producing fake/manipulated bills for car fuel / conveyance cost. Thorough cross checking, strong expense approval process and strict disciplinary action reduces this substantially.
6. Business Development Costs: How do you know that the Restaurant/Entertainment bills that Business Head just produced are not for his family outing?
Did you know that: There could be leakages in costs and sometimes unwanted costs are incurred if Sales & Business Development teams are not monitored closely and vouchers not checked thoroughly? Companies have implemented simple control measures like asking for the restaurant bill and not just the credit card statement to check the number of guests entertained AND checking if those expenses were incurred on a working day or a holiday.
7. Telephone Costs: Do you monitor long distance calls made by employees through the company phone number? Do you monitor roaming call costs?
Did you know that: By giving a Calling Card and by monitoring key long distance phone numbers, you could reduce your telephone cost substantially? This also reduces personal calls being charged to company account.
8. Lawyers Bill: Do you ask for cost estimate from your lawyer, before asking him to work on any matter?
Did you know that: Most lawyers work on time & effort basis? They would charge you even for the telephone call you had with them explaining the matter on hand, as well as for correcting the mistakes made in the first draft document prepared by them. You may have negotiated hourly rates, but always ask them to stick within a budget and minutely review their time sheets to check what you are being billed for.
9. Banking: Do you have a separate working capital (overdraft) account and a separate current account? Are you efficiently moving money across your various non-interest bearing current bank accounts to your interest bearing Working Capital (OD) account?
Did you know that: By setting-up auto sweep or other manual methods, and ensuring that funds from your current account are moved to your Overdraft (OD) account on daily basis, you could save a lot of interest cost in your OD account?
10. Interest Cost: Are you monitoring the interest rate charged by your bank on the loan you took from them some time back OR do you just pay whatever the bank charges you as interest?
Did you know that: You could miss out on interest cost savings just because your bank did not reduce the interest rate on your loan, while lending rates would have reduced?
Did you know that: If you have been servicing your loan well, and if you feel you are being charged higher interest rate, as compared to what another bank is offering, you could go back and renegotiate your interest rates with your bank? Remember, banks too need good clients.
There are other kinds of restructuring which are self explanatory:
Changes in top management
This means the changes in the top and the operating management in the company. This begins with the change in the CEO and Managing Director level changes to bring in the change driver commensurate with the need of the hour. The “person of the moment” is seen as a key driver of policy changes and mover and shaker by the promoter management and by the market. The team to work under the top person is many times left to his or her discretion. By and large the person brings along a tested team which perhaps has seen a good turnaround elsewhere which does not mean success is guaranteed, but that which could be tried out in the new place. This includes at the Board/operating level and may include heads of profit centers, HR, Marketing and other critical positions. Finance is usually a closely guarded level and the top management may like to bring in someone from within the loyal group of professionals.
Retention of key management team
There are also instances when some people are considered indispensable and their retention in the company is absolutely required. Such persons are retained in the company by paying the stay on bonus in cash or in the form of stock options. This will give significant motivation to persons for continuing in the organization and be a part of the changing environment.
Moving of operations such as manufacturing to lower-cost locations
In late 80’s and early 90’s the set up in various companies used to be “fractured infrastructure”. The Corporate Office set up will have Marketing, Procurement, Finance, HR apart from the usual corner office paraphernalia. The plant correspondingly would have the functions such as Sales, Purchase and stores, Accounts, Industrial relations, etc performing some parallel or even overlapping functions. Leaving a small set up for the Corporate office, MD and associated functions, it was found to be productivity and cost effective by combining functions in one location for cost saving, better plant management and effective customer and plant relations. Moving plant locations have also been done in the past to improve proximity to the raw-material and customer market, better availability of power etc.
Restructuring is a process and involves careful planning and application. The company can phase the restructuring process say over a period spanning 6 months to one year giving time for observing the impact of the restructure across the entire business. The costs and productivity being important, it is also necessary to keep the interest levels of customers and motivation of employees alive. Many restructuring has resulted in panic among these sections resulting in the flight of customers and key employees. The new of restructuring will therefore need to be timed out and suitably explained as it happens.