Corporate Finance/General Financial Management

It is not enough that a company markets its products and services. To be successful and solvent, it needs to keep its books in order, decide on appropriate funding, keep its investors happy, pay taxes, evaluate new projects, manage competition, optimize its cash flows, comply with all regulations and generally aim to increase shareholder wealth. No matter what type of firm, every firm has a finance department that takes care of all these matters. All of this is challenging work and specialists are hired for these roles. In India, Corporate Finance usually means General Financial Management (Not to be confused with Corporate Finance in Investment Banks which actually means Investment Banking services). 

Depending on the size and the nature of the firm, the finance department maybe small or large with several sub divisions. At the very least, Corporate Finance executives have to deal with accounting, financial reporting, taxation and cash management. Risk Management and Treasury Management are sometimes rolled into the corporate finance division, when the firm is small.Corporate Finance therefore is present in every firm as a backbone support function. Apart from this, consulting firms hire corporate finance professionals to help them advise their clients. 

A Corporate Finance executive can one day even hope to sit in the CFO’s chair. So the career options are varied and unlimited.
Key skills for an entry-level role would be:
1) Strong analytical and quantitative skills: Since this is a core finance and numbers related job, it is important to be comfortable with numbers and to possess strong analytical skills to put together various kinds of reports
2) Knowledge of accounting, financial analysis and reporting, regulations, taxation: Knowledge is the differentiator that can decide who can and who cannot be hired for this role. Someone who already has the requisite knowledge will always be preferred since being a support function, firms prefer not having to train the employee. Having the required qualifications and / or undergoing courses offered by training institutes would help in a big way
3) Attention to detail and diligence:Ultimately, you will be working with numbers and it is no good if you made a decimal point error in writing down the profits! Every word and number put out has strong implications on the company’s finances and hence accuracy and diligence is key
4) Problem solving: You need to demonstrate problem solving skills if you are vying for a senior role
5) Strong interpersonal skills:You will liaise with a lot of people in this job. They could be people within your own team, other departments, investors, customers, suppliers, bankers etc. To be effective, you need strong interpersonal skills and assertiveness
How to get in: 
• A major chunk of Corporate Finance professionals or Finance Managers are CAs or MBAs in finance
• Rarely, you also see commerce graduates who have worked their way up the ladder. 
• Certifications like the CFA may give you the extra knowledge/edge needed

At the entry level, candidates join as Analysts or Assistant Managers. Some of the key areas of responsibility are:

  • Accounting and book keeping
  • Compliance with all tax related and regulatory requirements and suggestions on improving tax structure
  • Gathering, analysis and reporting of financial data on a periodic basis to all stakeholders (daily/weekly/monthly)
  • Assessing the funds and working capital required, assisting in fund raising and actively managing working capital
  • Preparing project reports and financial models and get the same appraised from banks and financial institutions.
  • Getting optimal audit rating from rating agencies
  • Managing foreign exchange exposure
  • Managing long-term and short-term investment strategies
  • Effectively managing Banks/ Lenders, Board of Directors and investor relationships
  • Assisting in potential M&A / Fund raising / IPO activity
  • Overall striving towards efficient management of the company’s resources and minimizing costs

A typical day in the life of a Corporate Finance executive(entry level):

  • The day typically begins by working on the periodic financial reports and looking at the accounts of the firm
  • A project needs funding and you have to make a financial model for it
  • You have to attend a meeting with the sales team to understand their projections for the coming month
  • You have to put together a report for a bank which is about to lend you a large sum
  • The compliance division needs to discuss some matters, You have to attend and take notes
  • Then comes a weekly review of investments meetings with your team
  • Done for the day, but tomorrow is yet another day filled with numbers!

Salary and perks:

• The starting salary for Corporate Finance Analysts is around INR 5-7Lakhs / annum
• Consultancies and MNC firms often pay higher
• At the senior level, Corporate Finance executives are very handsomely rewarded based on their experience

Interview with Nageshwar Rao Pusarla who has 6+ years of experience in the Corporate Finance domain

Proschool : Please tell us about your background and qualifications.
Nageshwar : I am a B.Com graduate and a Chartered Accountant. I am currently a Manager in the Financial Reporting team at Dentsu Aegis Networks, handling a team of 5 people. Previously I have worked with HT Media and Quest Global

Proschool : Why did you decide to pursue this career and how did you get into this role?
Nageshwar : I was selected via campus placement.

Proschool : Your current role and a typical day?
Nageshwar : The work of a corporate finance professional is vast and includes various things, however at the entry level the job mostly involves playing with excel sheets and assisting seniors involved in analyzing various things for decision making. The role also includes reaching out to various departments and business units/ branch offices for information, consolidating the inputs and analyzing them. The advantage of a corporate finance role is that you get the opportunity to interact with and work with the top management like CFO’s, heads of different departments etc. This gives you a very good exposure and steep learning curve.

Proschool : High points in your career so far?
Nageshwar : In my first job our team completely changed the way forecasting and budgeting was done in the company. We implemented a detailed plan that forced the business and productions team to track their actual numbers at the lowest level and helped in identifying several inefficiencies. 
I was promoted as a Manager from Assistant Manager for my contribution to my current team. I was told that the team was very happy with me for being very supportive and helpful. The best thing you can hear as a manager is that your team is happy working with you.

Proschool : Important projects you have worked on?
Nageshwar : 
• Planning, Budgeting and forecasting financials, including preparation of annual, long-term plans and quarterly forecasts
• Management Decision support 
• Competition benchmarking 
• Assisting in Cash flow and Working Capital Management
• Pricing/Deal advisory which entails providing quotes or sales price to the sales team for the deals/projects 

Proschool : Challenges faced?
Nageshwar : The biggest challenge in a financial planning team is that most of the requests are received from the top management and are always ad-hoc and very urgent. Also, to fulfill these requests, you need to source information from other branches/business teams. You need to fast and need to have excellent communication skills and relationships, which play a very important part in getting the information. I was an introvert and had to really struggle at the start of my career
The challenge faced while working in a pricing team is to balance the expectations of both the Management and Sales teams. The Management will always expect high margins but Sales teams will always challenge you on the price quoted citing the difficulty in selling at a higher price. You need to strike a balance between good margins and competitiveness.

Proschool : Outlook for the industry?
Nageshwar : The outlook for a Corporate Finance professional looks very bright in India. The tremendous growth in the economy is opening up new opportunities as new businesses are setting up. India has become a global hunting ground for talent. Now we have the opportunity to think of “global” careers. Global companies like IBM, Tesco, Honeywell, Goldman Sachs, JP Morgan and many others have setup their captive finance functions in India, providing a great opportunity for Indian finance professionals.

Proschool : Career opportunities for aspirants in India (and elsewhere)?
Nageshwar : 
The various career opportunities/options for can be:
•  Financial Analyst: Duties involve determining financing needs, analyzing capital budgeting projects, long-range financial planning, analyzing possible acquisitions and asset sales, working on budgets, analyzing competitors, implementing financial plans
•  Financial Controller: Duties involve financial planning, accounting, financial reporting and cost analysis. May be called on to implement or work with a complex costing system, efforts at financial reengineering, transfer pricing issues or interface with auditors. This job requires extensive accounting knowledge 
•  Treasurer: Duties involve supervision of Treasury department which is involved in financial planning, raising funds, cash management and acquiring and disposing of assets
•  Credit/ Commercial Manager: Duties include establishing policies for granting credit to suppliers, setting guidelines for collecting on credit and considering whether to securitize receivables
•  Investor Relations Officer: Duties involve dealing with the investing public by disseminating financial information, responding to queries from institutional investors, issuing press releases to explain corporate events and organizing teleconferences with investors
•  More sophisticated corporate finance jobs might involve mergers and acquisitions activity, such as calculating the value of an acquisition target or determining the value of a division for a spinoff

Proschool : Word of advice for aspirants?
Nageshwar : In today’s competitive world, it is not enough to have strong technical skills. In addition to their subjects, aspirants should also focus on below areas:
•  Soft skills: You must enhance your communication skills, presentation skills and soft skills. Those who are not confident about their soft skills can join classes to develop their personality, body language, inter-personal and social interaction skills
•  Industry Awareness: You should be aware of the latest trends in your field. It is important to keep on doing courses to update your knowledge. Participate in all kinds of group activities like group case studies, simulations, industry interaction programs and inter-college level academic and extra-curricular competitions to keep yourself updated
•  Networking: To be a successful professional, you must be well connected and establish a good rapport with people in your field.