CFO Bridge Transforms Financial Operations with Five-Step Solution

Posted On 2024-02-06

Author Himanshu Sharda

Air Moving Products Co (AMPC) is India's leading manufacturer of air-moving products, with operations since 1988. AMPC air moving products are used in various industries, including but not limited to IT & telecom, HVAC, automotive and rail technology, refrigeration, cold chain technology, defense, etc. AMPC has a state-of-the-art manufacturing facility in Navi Mumbai and Bhiwandi with in-house processes like injection molding, motor winding, blade balancing, and welding.

CFO Bridge aimed to revolutionize financial operations through a multifaceted agenda. From optimizing working capital by implementing bi-weekly receivables reconciliation to developing a sophisticated MIS for insightful reporting, aligning margins with BOM, providing conceptual clarity training, and introducing structured weekly calendars for focused management discussions. The agenda focused on enhancing transparency, accuracy, and proactive decision-making in financial management.

Challenges faced by the organization before partnering with CFO Bridge

  • Within accounting and finance, AMPC embodies a conventionally structured entity. Despite its commendable profitability, the absence of routine evaluations of essential financial components such as Profit and Loss (P&L) and Balance Sheet (BS) has been evident.
  • Constrained by finite resources, AMPC has grappled with an inadequate infrastructure for managing accounts receivables effectively, particularly in the meticulous reconciliation against invoices. Based on this, there were no proper discussions with the Debtors' management
  • The organizational hurdles were multifaceted, encompassing challenges in Accounting, Management Information System (MIS) reporting, Budgeting and Projections, Working Capital Management, Bill of Materials (BOM) costing, and Margin Analysis. Additionally, there was a lack of structured training for the accounting team.

CFO Bridge's Robust Approach and Solution

  • Optimized Working Capital Management:

CFO Bridge identified critical challenges in working capital management, addressing issues such as the lack of a structured accounts receivable process.

CFO Bridge implemented a robust system to reconcile receivables against invoices bi-weekly, fostering transparency and enabling the management to scrutinize receivables precisely.

Emphasized in-depth monitoring of collections for major customers, ensuring a more comprehensive understanding and management of cash flows.

  • Strategic MIS Reporting Implementation:

Recognizing the absence of a comprehensive Management Information System (MIS), CFO Bridge initiated the development of a sophisticated MIS.

This new system streamlined the closing of books and provided detailed monthly comparisons of vital financial aspects, facilitating a thorough analysis of expenses, margins, and exceptions.

  • Margin Alignment between BOM and P&L:

We implemented a monthly activity to align margins based on the Bill of Materials (BOM) with those derived from the Profit and Loss (P&L) statement.

This meticulous process unveiled discrepancies in BOM, ensuring accurate margin calculations and enabling the correction of any misalignments.

  • Conceptual Clarity Training for Accounting Team:

Recognizing challenges within the accounting team related to conceptual clarity on financial terms and their impact on book closure, CFO Bridge initiated targeted training sessions.

These sessions aimed to enhance understanding of P&L, Balance Sheet, Cash Flow, etc.,

Ensuring that entries in the books were made with a clear conceptual foundation.

  • Structured Weekly Calendars for Management Focus:

Introduced a structured weekly calendar to maintain a focused approach to management discussions and decision-making.

Topics for each week were carefully curated, including areas such as debtors aging, expense analysis, inventory valuation, and addressing specific operational issues, ensuring a proactive and timely response to exceptions.

CFO Bridge’s Business Deliverables to AMPC

A.               Management Information System (MIS):

Implementing and maintaining a sophisticated MIS facilitates detailed and insightful reporting for strategic decision-making.

B.     Margin Analysis:

Rigorous comparison of Bill of Materials (BOM) against Selling Price, aligning margins with the Profit and Loss (P&L) statement to ensure accuracy and financial integrity.

C.    Debtors Management Reports:

Generated comprehensive reports about debtors' management, offering insights into receivables and enhancing overall financial control.

D.    Stock Analysis Across Units:

In-depth analysis and comparison of Finished Goods (FG), Work-in-Progress (WIP), Semi- Finished Goods (SFG), and Raw Materials (RM) across various units, providing a clear understanding of stock dynamics.

E.     Operational Expertise:

Expert handling of diverse operational facets, including but not limited to expeditious audit closure, optimization of export benefits, and strategic planning for machinery import duty savings. These measures contribute to overall operational efficiency and fiscal prudence.

AMPC Achieved Financial Metrics After Implementing CFO Bridge’s Solutions 

CFO Bridge's initiatives yielded significant metrics in financial transformation. 

·         

    • Enhanced working capital management resulted in a streamlined bi-weekly receivables reconciliation process, fostering transparency. 

·         

    • Implementing a sophisticated MIS led to efficient book closures and detailed insights into expenses and margins. 

·         

    • Monthly alignment of margins through BOM activities ensured precision. 

·         

    • Conceptual clarity training sessions elevated the accounting team's expertise. 

·         

    • Structured weekly calendars facilitated proactive management discussions, addressing critical areas. 

These metrics reflect improved financial accuracy, transparency, and proactive decision-making within the organization.

Conclusion

CFO Bridge successfully addressed critical issues in working capital management, enhancing reporting accuracy. The introduction of a comprehensive MIS allowed for timely insights into expenses and margins, replacing the traditional P&L approach. Aligning BOM with selling prices improved margin accuracy. Furthermore, strategic training sessions for the accounting team enhanced their understanding of financial concepts. Implementing a structured weekly calendar streamlined management discussions and fostered proactive decision-making—these holistic solutions fortified financial processes, promoting a more informed, efficient, and responsive organizational framework.

Contact CFO Bridge

Unlock financial excellence with CFO Bridge. 

From optimizing working capital management to implementing MIS reporting and aligning margins meticulously, our solutions drive precision and insight into your financial landscape. 

Elevate your team's knowledge with conceptual clarity training, and foster a proactive management approach with our structured weekly calendars. 

Experience transformative financial management. 

Connect with CFO Bridge today and embark on a journey to elevate your financial capabilities.

 

Ready to take your
finances to the next orbit?

Let's talk! Book your free consultation today

Get In Touch
Download The Brochure