Dialogues with CFOs – At The CFO Summit 2024

The CFO Summit 2024 was all about finance, compliance, and technology. During our enlightening time there,?Naveendran Subramani, the Deputy Manager at?GSTrobo- product of Binary Semantics, got a chance to engage in an enriching dialogue with?Vivek Venkatesan, the Chief Financial Officer at?Ninjacart.??

Follow through on the conversation,?a fusion of?expertise, experience, and forward-thinking ideas.??

No one denies the ever-increasing requirements in compliance today. It is a vast subject, and no one can be 100% compliant. So, as a CFO, one has to deal with multiple parameters. However, there are key metrics on which the finance team and CFOs need to focus.???

Vivek underscored the non-negotiable nature of certain compliance areas, particularly those related to?labor, which can significantly impact a company's value creation. He also highlighted the gravity of non-compliance with the PF and ESA Act, where there is no room for compromise.??

With the PF and ESA Act, there is no compromise. The penal provisions are significant, and if you?are caught?on the wrong side of the law,?then?the consequences can be severe.???

He also emphasised the importance of regulating compliances related to GST and direct tax.??

According to him, there is no room for compromise, especially in business dealings with agriculture, where rules keep changing?in terms of?what kind of rates apply every year. Their business model is also changing. They actively track this to understand what is applicable. Of course, help also comes from the industry, where they keep getting?a lot of?information about what has changed.??

So, immediately, that gets disseminated within the tax team.?Let's say there is a?change in the?direct or indirect tax law.?That gets disseminated to the tax team. Initially, when they do an impact analysis, they come back saying what the impact is.????

However, during the conversation, the conclusion drawn was that tax compliance and labour compliance are non-negotiable.???

We also?dwelled on the topic of what are?the key challenges CFOs face when integrating tax processes into financial operations.??

Vivek feels it's?largely?the challenge of handling systems and data.?That is the biggest challenge because most tax tools are supposed to provide a computation ability to calculate taxes?and help?you with return filing,?etc.?But most?of the?tools are garbage-in-garbage-out models, where the wrong data goes in.??

Then, what you get?is wrong. So,?he?feels the most critical part is the agility of a taxation tool to integrate?not only the ERP but also?many subsystems in the company.???

And the second thing is the flexibility the tool provides for?actually?correcting data. We commonly see tax teams working on time crunches, which leads to wrong data entries.?This?leads to cases where data goes wrong, and you need to adjust it manually.?How easily, what?kind of transition layer or?adjustment?layer?you?provide?in terms of?adjusting?the data with the user team?he?thinks?are?the two critical things when it comes to digitizing tax.

What we are seeing is?not many organizations?being?interested in automating their compliance management. Some of them are not willing to?go for the?cloud software. The reason is?majorly?to keep all compliance processes in-house.???

We asked about the same?to Vivek that as?a?CFO is?he also aligned with this practice???

He feels that whether a company is a new age or an existing one, there is always an appetite for external software.???

In fact,?for?Ninjacart's digitization, they are?only?looking?at external software. They are?not?looking for an in-house solution. The reason is that these?are tech companies that?have invested in a specialized vertical, like tax?or accounting?or whatever.??

So, they have already done the hard work. Why do you need to reinvent the wheel? Companies worry about two things when choosing tax software: one is the cost impact.??

What is the cost of integration? And what is the operating cost? Does it?really?make sense? Does it help you achieve efficiency, or will it add to your cost base? How are you going to justify it? So, that is one thing that needs to?be addressed in terms of?pricing.?That?is very important for a CFO?while?implementing these kinds of compliance systems.??

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The second thing CFOs worry about with at least new-age players is how long will the product be used in the company.?So, there is always a risk that if a new player approaches a company, what is the risk of that company not being able to continue for an extended?period of?time.?What happens to my compliance??I think if?these two?are addressed?and enough confidence?is provided?to whoever is taking the automation call, it will be a smooth sale for anybody.??

Finance and Compliance – Road to Better Financial Progress??

While we can't deny that most organizations are at bottlenecks due to the heavy compliance duties they follow day in and day out, it is also true that compliance is essential,?especially?to mitigate risks and ensure the proper flow of working capital.???

While there are many facets of compliance, the integration of finance and compliance is?key?to elevating the overall role of a CFO. Whether it's data handling, technology progression, risk management, or sustainability, all these are intertwined, and only the culmination of these can lead to forging new paths towards financial excellence.??

To assist CFOs in embracing the future, Binary Semantics offers a suite of compliance suite, including return filing, reconciliation, e-invoicing, and E-Way Bills. Their tax-tech software, GSTrobo, is a powerful tool that enables CFOs to navigate the complexities of taxation and ensure compliance.??

Read our full coverage of CFO Summit 2024 here -?https://www.binarysemantics.com/blogs/exploring-the-future-of-finance-highlights-from-cfo-summit-2024/?

For more interesting articles, visit?www.gstrobo.com