MyCFO India - Finance Effectiveness To Fulex

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MyCFO India - Finance Effectiveness To Fulex
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Our Client
Our client Fulex is in the business of developing
fuel efficiency solutions for the Genset
manufacturers. This involves carrying out RD on
the technological and commercial feasibility of
the products and, once the feasibility is
demonstrated, developing and manufacturing these
products. The Company is in a high growth phase
with a need for maintaining high level of working
capital to sustain the growth, in addition to
capital requirement to fund expansion.
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The Objective Of The Budget Exercise Was

• To develop 5 / 10 year plans, Annual Operating
  Plan or Annual Budgets with monthly / quarterly
  break-ups at a departmental and segment level
• Determine sales targets to the sales team,
  broken by products, geographies, customer
  segments etc.
• Determine PL position and cash/working capital
  requirements at various levels of sales
• Determine the amount of capital to be infused to
  support ongoing operations and expansion plans

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The Objective Of The Budget Exercise Was

• Planning for manpower needs
• Expense control, by allotting expense budgets to
  departments
• Determining profitability by product, geography,
  customer segments etc
• Exploring feasibility of expansion plans with
  metrics such ROI and IRR
• Scenario analysis, Sensitivity analysis and
  what-if analysis through modification of the
  assumptions.

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Challenges For MyCFO

• Arriving at a meeting point between the
  top-down and bottom-up approaches
• Maintaining a balance between trend-based and
  zero-base approach
• Managing iterations and version control
• Consolidation of inputs received from diverse
  sources
• Seeking consensus and buy-in across the
  organization on a common set of goals
• Changes in assumptions after freezing the
  budgets (this was handled through quarterly
  rolling forecasts)

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MyCFO Approach

• Designing and disseminating information to
  capture the assumptions and base data from which
  the outputs could be derived with the least
  manual intervention
• Discussions with the management and department
  heads for obtaining the inputs and for seeking
  clarifications
• Performing iterations to ensure a balanced
  budget
• Obtaining approvals and sign-offs from
  individual departments

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MyCFO Approach

• Presentation of various scenarios to the
  management
• Final sign-off and presentation
• Dissemination of departmental and segmental
  budgets
• Control and monitoring

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How The Client Benefited
The exercise helped the company to formulate its
5 and 10 year plans along with the annual
operating plan, department and segment sales and
expense targets were formalized, key ratios and
trends were fixed and tracked, this allowed the
company to benchmark key metrics against industry
parameters and allowed the Board and the
Management to track actuals on a periodic basis
against the budgets.
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