Tuesday, October 12, 2021

Avoid Shriram Transport Finance: Sudarshan Sukhani




Sudarshan Sukhani of s2analytics.Com told CNBC-TV18, “Shriram Transport Finance Corporation’s charts are announcing that it’s to keep away from. I do no longer think there may be whatever there. The different NBFCs are much better off.”

“Mahindra & Mahindra Financial Services has been an outperformed, but other than today whilst we assume that NBFCs will do well, widely there may be a deep correction in NBFCs. So, all people seem to invest wishes to be patient. This is not a time to shop for that.”

Transport

“Den Networks bounced on supposed news, but there is no exchange at the charts. So if you have it, revel in the news; however, do now not buy,” he added.

Nobody knows your business better than you do. After all, you are the CEO. You know what the engineers do; you know what the product managers do, and nobody understands the sales process better than you. You know who is carrying their weight and who isn’t. That is unless we’re talking about the finance and accounting managers.

Most CEOs, especially in small and mid-size enterprises, come from operational or sales backgrounds. They have often gained some knowledge of finance and accounting through their careers, but only to the extent necessary. But as the CEO, they must make judgments about the performance and competence of the accountants as well as the operations and sales managers.

So, how does the diligent CEO evaluate the finance and accounting functions in his company? All too often, the CEO assigns a qualitative value based on the quantitative message. In other words, if the Controller delivers a positive, upbeat financial report, the CEO will have positive feelings toward the Controller. And if the Controller delivers a bleak message, the CEO will have a negative reaction to the person. Unfortunately, “shooting the messenger” is not at all uncommon.

The dangers inherent in this approach should be obvious. The Controller (or CFO, bookkeeper, whoever) may realize that to protect their career, they need to make the numbers look better than they really are. They need to draw attention away from negative matters and focus on positive matters. This raises the probability that important issues won’t get the attention they deserve. It also raises the probability that good people will be lost for the wrong reasons.

The CEOs of large public companies have a big advantage in evaluating the finance department’s performance. They have the audit committee of the board of directors, the auditors, the SEC, Wall Street analysts, and public shareholders giving them feedback. In smaller businesses, however, CEOs need to develop their own methods and processes to evaluate their financial managers’ performance.

Here are a few suggestions for the small business CEO:

Timely and Accurate Financial Reports 

Finance

Most CEOs, especially in small and mid-size enterprises, come from operational or sales backgrounds. They have often gained some knowledge of finance and accounting through their careers, but only to the extent necessary. But as the CEO, they must make judgments about the performance and competence of the accountants as well as the operations and sales managers.

So, how does the diligent CEO  Avoid evaluate the finance and  Finance accounting functions of Transport in his company? All too often, the CEO assigns a qualitative value based on the quantitative message. In other words, if the Controller delivers a positive, upbeat financial report, the CEO will have positive feelings toward the Controller. And if the Controller delivers a bleak message, the CEO will have a negative reaction to the person. Unfortunately, “shooting the messenger” is not at all uncommon.

The dangers inherent in this approach should be obvious. The Controller (or CFO, bookkeeper, whoever) may realize that to protect their career; they need to make the numbers look better than they really are, or they need to draw attention away from the negative matter.

The chances are that you have been advised that you should insist on “timely and accurate” financial reports from your accounting group at some point in your career. Unfortunately, you are probably an outstanding judge of what is timely, but you may not be nearly as good a judge of what is accurate. Certainly, you don’t have the time to test the recording of transactions and to verify the accuracy of reports, but there are some things that you can and should do.

  • Insist that financial reports include comparisons over several periods. This will allow you to judge the consistency of recording and reporting transactions.
  • Make sure that all anomalies are explained.
  • Recurring expenses such as rents and utilities should be reported in the appropriate period. An explanation that – “there are two rents in April because we paid May early” – is unacceptable. The May rent should be reported as a May expense.
  • Occasionally, ask to be reminded about the company’s policies for recording revenues, capitalizing costs, etc.

Beyond Monthly Financial Reports

Avoid

You should expect to get information from your accounting and finance groups daily, not just when monthly financial reports are due. Some good examples are:

  • Daily cash balance reports.
  • Accounts receivable collection updates.
  • Cash flow forecasts (cash requirements)
  • Significant or unusual transactions.

Consistent Work Habits

We’ve all known people who took it easy for weeks, then pulled an all-nighter to meet a deadline. Such inconsistent work habits are strong indicators that the individual is not attentive to processes. It also sharply raises the probability of errors in the frantic last-minute activities.

Willingness to Be Controversial

As the CEO, you need to make it very clear to the finance/accounting managers that you expect frank and honest information and that they will not be victims of “shoot the messenger” thinking. Once that assurance is given, your financial managers should be an integral part of your company’s management team. They should not be reluctant to express their opinions and concerns to you or other department leaders.

We created Finance For Business Owners to help business owners, CEOs, and other non-financial managers gain a better perspective and understanding of the financial side of the business. With our affiliate, The Fidelis Consulting Group, we created a series of 10 – 15-minute presentations and short articles to help business leaders better understand financial issues and incorporate that understanding into their daily operations and strategic planning.




Jenna D. Norton
Creator. Amateur thinker. Hipster-friendly reader. Award-winning internet fanatic. Zombie practitioner. Web ninja. Coffee aficionado. Spent childhood investing in frisbees for the government. Gifted in exporting race cars in Orlando, FL. Had a brief career short selling psoriasis in Ohio. Earned praise for getting my feet wet with human growth hormone in Minneapolis, MN. Spent several years creating marketing channels for banjos for farmers. Spent 2002-2010 merchandising karma for no pay.

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