Service Category: Advisory

Ownership and Governance

Are you struggling with Ownership and Governance questions alone?

• Want to pass on the business ownership to next generation yet afraid to loose control at strategic level?
• More than one successor, who gets be the next leader?
• Paying some a little too much while others are underpaid?

Find Lucrative Solutions made easy by Your Finance Coach!

We can employ family governance rules to ensure there is lesser conflict. Just to mention a few:

• Set policies for family actions, and decisions
• Address compensation rules
• Articulating common and agreed upon vision and mission
• Establishing a framework to promote learning together, sharing decisions, and communicating
• Determining family ownership policies
• Resolving conflicts
• Fostering family education and information

Apprehension Recruiting

Are you hesitant in establishing Roles and Responsibilities of Family and Non-Family members?

• Family member not performing as expected. How to clearly demarcate family ties and business relationships not to impact business performance and agendas?
• In need of a senior management role in the business, how do you choose outside the family?
• How do you ensure fair treatment to the family members who are not employed in the business?

Consult YFC for all your Hiring Policies.

Family dynamics aren’t the same as business dynamics, and a combination of the two can be a disaster or a blessing— depending on how proactive and transparent you are. We could help you

• Identify Your Business Philosophy; is it family first, Business first or Family Business Enterprise
• Predefine Employment policies, we can help you develop a ‘family employment policy’ that specifies the criteria and the process of joining the family business addressing the process of applying for family employment, mentoring, training and assessment.
• Determine Power Limits for all operating philosophies, and ensure that family as well as non-family members know their power as well as the fact that they are valued team members.

Untimely Demise: Poor Succession Planning

It’s well documented that just 30% of all family businesses last into the second generation, and only 12% make it to the third generation. Why? It’s often the result of poor talent management.

Wondered why your empires collapsed an immature way?

• Loosing revenues while transitioning from one generation to another?
• Sibling rivalry leading to unattended tasks and poor revenue generation?

We at YFC work towards establishing steps to help you run a sustainable business, but feel like a family!

• Create a Mission Statement to identify the family’s vision for the future, documenting its dreams, hopes and ideals.
• Choose the Right Successor, many family business owners are not comfortable allowing a non-family member to assume the CEO role
• Clarify Roles and Responsibilities; demarcating ownership from management is a must.
• Put down a Strong Foundation includes implementing the best business practices cited above and ensuring you’re guided by principles and values that best define your family.

At Your Finance Coach, we can address the above mentioned and many other to assist you structure your family business from holistic approach. If your business has just started and you seek assistance from a family member or your work is expanding or you are facing challenges pertaining family dynamics.

Amidst all this drama we invite you to spare a couple of minutes and write to us. Together we can bring about excellence in Business as well as harmony in the family!

The Staunch Implications remain

Unfortunately, when it comes to split of family businesses by law of section 47 of Income Tax, exempts from capital gains any complete or partial distribution of property of a Hindu Undivided Family is just about the sole manifestation of the equity philosophy in Indian tax laws.

• Do you share ownership of a holding company or a group structure, and want to split?
• Statutory demerger ruled out on basis of non trading business?
• Want to take the reconstruction under Insolvency Act but scared of the disruptive and expensive formalities of liquidating assets?
• Do you attempt to achieve a tax neutral demerger at the investment or holding company level?
• Bogged down by the complex court procedure, coupled with numerous compliance requirements and potential stamp duty costs involved with demerger?
• Suffering value decretive results and require heavy consensus from the External shareholders involved?
• Does your mode of restructuring involve several share transfers, probably on barter basis, to achieve the desired results?
• Vertical split is not feasible given the complexities of the shareholding pattern across a chain of investment companies?
• Want to divide stake along with demarcation of management control but too much litigation involved?

In summary, given the uncertainties and complexities involved, implementation of a family split requires careful and extensive planning to mitigate unwanted tax costs. Without a protective mechanism under the Income tax Act, the split up often involves a series of opaque share and business transfers which are not necessarily based on an arm’s length. If you are asking these questions, let us assure you are not alone!

Our Reliable Measures

Demerger could be brought to affect by either of these ways:

• Demerger by agreement between promoters
• Demerger under the scheme of arrangement with approval by court
• Demerger under voluntary wining up and the power of liquidator

The demerger may be partial or complete, we here at Your Finance Coach are experts in providing careful demerger relief provisions in the context of restructuring or demerging family groups. We provide intricate services like:

• Demerger Division 125: gain direct ownership in an entity owned indirectly.
• Establishing, A demerger group comprising the head entity of a group of companies or trusts and at least one demerger subsidiary. A company or trust is the head entity of a demerger group if no other member of the group has ownership interests in the company or trust
• Differentiate between Roll-over or No Rollover in favour of owners interest
• Establish and list down Consequences and measures of roll-over well in advance
• Consider Excluded capital gains and losses that are made by members of demerger group for disregard
• Plan Demerger dividends
• Tax consequences, planning of Capital Gains Tax

Conclusion

Although we understand that demergers are essentially undertaken either as an exercise of corporate restructuring or to give effect to kind of partitions in case of family owned enterprises. Whatever be the situation, often we forget the underlying fact that a demerger should eventually lead to smooth functioning of each segment with as much less tax and other litigations.

We can help you make this demerger a win-win for both the undertaking company as well as the resulting company.

Want to know how? Drop us a message and experience it for yourself.

Result Oriented

The job of advisory firms is to analyze the financial data and prepare a comprehensive report by monitoring the current financial situation of the venture. Advisory firms are focused to deliver the best results for their clients by re-shaping the financial report of the business.

Innovative approach

Advisory firms specialize in taking an innovative approach to derive the best solution for the venture. Advisory firms have the required knowledge and competency to resolve the financial query and discrepancies arising at the business front, which generally business owners are completely unaware of.

Increasing Productivity

The basic objective of every business is to increase productivity and maximize their revenues. However, often, businesses do get stuck due to any mis-operations within the financial department which leads can lead to incur losses for long periods. Advisory firms can study the economic report of the firm and draft healthy ideas which can help in stabilizing their financial activities and maximize their productivity.
A ‘clear-concise’ accounting SOP is the best way to assess your operating performance as it allows you or the investors to have a transparent look into the daily finance activities. It’s crucial to have an organized accounting structure to ensure you have a smooth flow. This post enlists some of the components of your accounts department and helps you understand why this ‘Accounting Advisory’ is so important for any business.

Accounts Department

Developing the SOP directly helps you to focus on your business and streamline your accounting operations. The Inclusion of procedures increases efficiency and uncovers outdated or ineffective practices from the department. The corporate accounting department is often limited by ‘age-old’ tradition. Complex processes like AP and AR have to be simplified in order to attain the best financial results.

Purchase Department

Managing the Purchase department can be one of the most daunting tasks with a huge scope of significant financial gains by designing an effective work policy. Purchase department is the only major function which liaises with the internal team and alongside outside vendors. Most of the daily functions include planning and executing financial deals as per requirement. As a core of accounting process, streamlining the activities helps to keep the ‘heath’ of the business in good colours! An effective and sustainable SOP will be able to cover the below points:

• ensure purchase transactions are carried in a transparent manner.
• purchase department to have clarity on all purchases in terms of cost, quality of goods and services. and every purchase should be recorded.
• people associated with purchase department should not indulge in unfair practices by favouring business orders to their known suppliers or vendors.
• procurement of Goods and Services are subject to contract.
• Determine the environmental impact of the procurement process across the life cycle of products.

Standard Accounting Practices

The Inclusion of ‘Standard Account Practices’ or ‘Accounting Standards’ by drafting an accounting SOP ensures that you are aligning to the best practices using the technology to your advantage. Accounting standards are the set of rules which are applicable for financial reporting purposes. Their objective is to prepare the financial statement based on the financial measurement and disclosures available with the department. Accounting Standards provide a framework for accounting and reporting practices and help the officials to implement the best practices to attain success for the organization.
Your company must abide by the set of rules when reporting information in its financial statement. As an owner, it’s mandatory for you to follow the proper method for recording different transactions of your business. Not just to achieve business operations, it further helps you in meeting regulatory standards and building external goodwill. Below is a list of the key benefits you get by following the standard practices.

Transparency

Implementing the accounting standards eases the level of understanding of the financial statements. An investor or a prospective buyer would prefer looking at a statement which is as per the accounting standards.

Guidance

Whoever in your business is trying to record the events, be it an accountant or other employees, can easily take the guidance from the published accounting standards. This creates trust and builds confidence within the finance department and the owners as everyone is united to help each other.
Maintains compliance: Use of accounting standard comes very handy and beneficial while following regulations and in meeting compliances. Following the practices avoids any issues with the Audit teams or during the checks done by the Govt officials at regular intervals.

Account Analytics Reports

You can’t sustain a business if you are unable to gauge or monitor your activities. The dynamics of business operations keeps changing and hence it’s imperative for you to have a stringent system in place which can actually show you the progress. If you fail to generate appropriate accounting reports, then handing business turbulence will be a challenge. Along with framing the network, it’s important to check the execution to ensure that your hard work and the procedures you have derived are giving you the best results. Having ‘Account Analytics Report’ helps you to measure and analyze business conditions and market. An analytic report is also beneficial in optimizing your procedures and overall business statistics. Having access to real-time analytic reports helps you to oversee how your business plans are working which makes your business more agile. By taking advantage of the customizing the financial pages and using multiple reporting options, you are able to figure out the exact financial condition of your business.

Performance

Tracking your accounting transactions on a weekly, monthly and yearly basis will give you the true picture of your finance. This will help you to analyze your progress from the past years and also help you to derive new strategies for the coming financial years. Reporting uncovers all the accounting sheets to you so that you can evaluate the performance of the internal teams. This is also helpful in correcting any flaws or wrong-doings so that the performance graph can go upwards and help the business. For sure, if you are tracking the progress and maintaining the performance every quarter through the analytic reports, you can be assured that your finance team is consistent in their work and you don’t need to worry about.

Managing business relation

In business, having a good relationship in the markets helps a lot in creating goodwill which can assist to increase the valuation to a certain extent. The evaluating team has to have a process through which they can convert the goodwill in monetary terms. Having a comprehensive and comfortable channel of communication with the owner is quite important.

Business study

It’s vital for the team to study the nature of the business beforehand they start the evaluation process. A detailed study and analysis help the evaluation team to learn about the key factors or the ‘USP’ of the business which shall be useful in scaling up the valuation.

Experience

The evaluation process requires deep knowledge and experience in gathering the scattered pieces of information and presenting them to the prospective buyer or investor in a perfect business case. Here the ability of the team counts a lot to showcase the strengths and positive side of the business which will boost the valuation.

Conclusion

As an entrepreneur you have to be ready to encounter the unforeseen situations like succession planning, resolving business disputes, raising equity, establishing shareholder value, handling divorce and financial reporting to name a few. When the actual time comes, doing a guesswork can prove to be a costly move which can land you in big trouble. A comprehensive valuation is the best investment which highlights the genuine financial worth which can help you to take the best foot forward when you actually need it.

Exit Strategy

The life of an entrepreneur is quite synonymous to a roller-coaster ride. As the dynamics of market changes so does the fortune of the business and here’s when a well-crafted ‘Business-Plan’ can be a life saviour. However, one key point which business owners often miss out is writing the ‘Exit Strategy’. Although it might not be a ‘positive’ phrase at the start of a business, Industry experts and analysts believe that anticipating an ‘exit strategy’ can save you millions. HOW? This post covers the life-cycle of an exit strategy and answers why it’s an integral part of every business plan.
Formulating an exit strategy at the start of your business helps to be focussed and have a clear vision for your business. The motive is to determine how a business can maximize its value, rather than being sold in a haphazard way or in a simple loss. Ideally, it allows the business