Revenue Maximization is a major component of Sustainable Profit Growth Framework (SPGF). Generating Sales is primary responsibility of Sales & Marketing Heads , however Finance Heads , as a part of Corporate Management has also to play an important part in this. Finance function arranges funds from Banks and Institutions on basis of some Revenue Projections. Hence Finance Head is an important stakeholder in ensuring that Revenue is Maximized.
Revenue Maximization involves following steps :
Realistic Sales Plans : It is observed that Sales Plans are made with optimistic mindset. This is the reason that most of the times Sales Targets are not met. Finance Head should ensure from an independent view that Sales Plans are based on ground realities.
Alignment with Production and Supply Chain : Finance Head as a key part of Annual Budget Team has to see that Sales Plan is properly aligned with Production , Manpower and Material availability.
Funds Availability : Finance has to ensure that sufficient funds are available for Long Term and Short Term Capital .
Control over Discounts, Credits and Price Cuts : Finance Head has to ensure that there is adequate due diligence given to discount and price cuts policy advocated by marketing department.
Achievement of Targets : Finance function has to keep watch on Achievement of Revenue Targets set for Month and Quarter. Any shortfall on targets has to be escalated by Finance to Top Management.
Developing Dynamic Financial & Accounting MIS Framework
Finance is core to any business organization. Its involvement starts with arrangement of Funds to start the business and continues till its closure. Any Financial MIS framework should originate from Key Functions of Finance which are as follows :
Strategic Finance
Investment Evaluation – Utilization of Capital in right projects.
Finance Arrangement for Long Term Assets & Working Capital Finance.
Risk Management – Managing Risk in business and environment.
Stakeholder Communication – Shareholders, Bankers, Investors.
Financial Value Creation – Maximization of Business Valuation
Accounting & Statutory
Accounting of Transactions of business.
Statutory & Taxation compliances
Financial Efficiency
Profit Maximization from operations. – Revenue Maximization and Cost Minimization.
Financial Hygiene – Fraud & Mistakes Prevention.
Treasury Management
Keeping above functions in mind, following Financial MIS Reports can be generated :
Investment Efficiency MIS
Every business starts with introduction of financial capital. This capital could also have been invested in alternate investment opportunities. Apart from own Capital every business also arranges for loans from different sources. This Loan has to be repaid by promoters irrespective of profitability of business. Hence it is desirable that MIS should be generated to check returns and health of financial capital deployed in business. Following MIS may be generated to this effect.
Finance Macro Environment Report
Financial Value Creation Report
Investment Efficiency Report – Liabilities Based
Investment Efficiency Report – Assets Based
Investment Efficiency Report – Future Incomes
Investment Entry Report
Investment Exit Report
Credit Rating Report
Capital Expenditure MIS
Capital Expenditure Control is a vital element of Financial Management functions. Capital Expenditure generally involves large sum of expenditure. Further capital expenditure has a long term impact on profitability of company. Hence its finds an important place in Financial Management MIS. Some of key capital expenditure and assets related reports are as follows:
Capital Expenditure Analysis
Assets Disposed Off Report
List of Assets Not Authorized for Acquisition /Disposal
Fixed Assets Verification Analysis
List of Assets Pending Disposal
Reconciliation between Fixed Assets Register and Nominal Ledger
Project Progress MIS
Project MIS is a combination of Technical and Financial aspects of management. Every project has multiple components of cost and funding. It is essential that all these components progress as per schedule. This shall ensure that project is completed in time which in turn shall save Time & Cost Over runs. From Finance Angle two types of reports should be generated:
Project Progress Report: Expenditure Incurred
Project Progress Report: Means of Finance
Risk Management MIS
Risk Management MIS
Risk Coverage MIS
Insurance Adequacy Analysis: Market Value:
Premium Paid Analysis
Pending Claims Analysis
Exchange Fluctuation MIS
Regulatory MIS
Management of regulatory matters covered under different acts such as Income Tax, GST, Company Law, SEBI, RBI etc. are handled by Finance department in most organizations. A proper M.I.S shall help the Finance Manager to keep tab on all important aspects of this area of his responsibility. He should develop checks & systems to come to know about any deficiency in time and take necessary action. Broadly M.I.S for Taxation Compliances has to be patterned around following reports:
Statutory Laws Compliance Report
Statutory Laws Deficiency Report
Statutory Returns Compliance Report
Statutory Penalties Report
Forms Not Received
Financial Records MIS
Financial Records MIS
Accounts Master MIS
Reconciliation MIS
Debit Balance Confirmation MIS
Financial Analysis & Cost Management
Balance Sheet Analysis:
Profitability Analysis: Total Cost approach:
Profitability Analysis: Marginal Cost Approach:
Cash Flow Analysis:
Cost Minimization MIS:
Working Capital MIS
Working Capital Analysis
Debtors Analysis
Legal Debtors Analysis
Creditors Analysis
Vendor Advances MIS
Funds Management MIS
Deposit Float Report:
Payment Float Analysis
Bank Movement Plan:
Idle Funds Analysis:
Employee Accounts Analysis
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