As part of our standard practice, we include in the Shareholders’ Agreement (SHA) the right to receive monthly MIS in our prescribed format.
The idea is simple, to stay well-informed of progress, with data that substantiates the business updates shared by founders.
At Auxano, we insist that every portfolio company sends us a Monthly MIS within 15 days of the month-end, consistently in a standard format we provide.
This is not an internal audit or oversight of operational matters of the company.
When you start reading MIS carefully, you realize — data talks. Sometimes it whispers, sometimes it shouts, but it always tells a story beyond the obvious.
In reviewing MIS across companies, we have often come across details that warranted a closer look and deeper conversation. Let us explore some of these:
One-time Income as Revenue
A company booked a large one-time fee as Revenue from Operations. At first glance, the numbers looked fantastic — topline growth seemed strong.
But during our catch-up call, we learned this was actually a grant received from a government institute.
The reclassification was important: the “growth” was not recurring business activity.
As reported:
| Particulars | July 2025 | August 2025 | Growth MoM |
| Revenue from Operations | ₹42,00,000 | ₹70,00,000 | +67% |
After re-classification:
| Particulars | July 2025 | August 2025 | Growth MoM |
| Revenue from Operations | ₹42,00,000 | ₹40,00,000 | –5% |
| Other Income (Grant) | – | ₹30,00,000 | – |
The revenue was flat to declining; the jump was a one-time grant.
GMV as Revenue
Another founder presented Gross Merchandise Value (GMV) under Revenue. The topline looked impressive — until we asked for GMV to be shown separately.
When corrected, the true revenue (take-rate) was only a fraction of the reported number. A reminder: scale matters, but so does the quality and nature of revenue.
| Particulars | Apr-25 | May-25 | Jun-25 | Jul-25 |
| Gross Merchandise Value (GMV) in INR | 1,17,20,000 | 1,13,12,482 | 1,00,10,000 | 1,21,55,505 |
| Net Revenue (INR) | 37,32,087 | 41,12,122 | 35,28,124 | 43,33,001 |
Expense Drift
Take something as routine as Office Rent – Month to month, you might notice just a small bump – nothing alarming. But if you zoom out, a pattern emerges:
| Month | March | April | May | June | July | August | Change |
| Office Rent (INR) | 1,51,000 | 1,80,000 | 1,81,000 | 1,82,000 | 1,85,000 | 1,90,000 | 26% |
| Change | Base | Spike | Flat | Flat | Slight increase | Further increase | Increase from April |
At the end of 6 months, the baseline has quietly shifted upwards by 26%, even though the last month looks like “just another small increase.” (whereas 5-10% increase y.o.y. can be expected)
This is why trend analysis over time matters. MIS is not just about single-month snapshots.
Misclassifications of Costs
In one case, expenses that should have been classified as direct expenses were booked under other expenses.
This inflated the Gross Profit %, creating the illusion of healthy unit economics.
When reclassified, the true GP was a meagre 5%.
As reported:
| Particulars | Apr-25 (Amount INR) |
| Net Revenue (Take Rate) | 37,32,087 |
| Delivery Cost (90%) | 33,58,878 |
| Reported GP (10%) | 3,73,209 |
Revised:
| Particulars | Apr-25 (Amount in INR) |
| Net Revenue (Take Rate) | 37,32,087 |
| Delivery Cost (90%) | 33,58,878 |
| Other Direct Logistic/Packing Cost (5%) | 1,86,604 |
| True GP (5%) | 1,86,605 |
Sales Return & Cancellations
Revenue alone doesn’t tell you much. When you break down returns, the reasons matter:
- If it’s quality-related, there’s a product/service problem.
- If it’s overstocking-related, it means inventory was pushed into channels to inflate topline.
Either way, the “growth” number is not what it seems.
Reductions in Expenses
A drop in expenses is obviously good for the company, but sometimes it needs further discussion as to why is it so ? Is it cost optimization or scaling down?
- Variable cost reduction (e.g., server usage, campaigns) → usually efficiency.
- Fixed cost reduction (e.g., rent, salaries) → could mean contraction of business, not optimization, needs further discussion.
Increasing Payables — Better Cash Flow or Hidden Stress?
An increase in payables may look like better payables management; however, a dissection of the payables may reveal a crisis situation.
Unpaid salaries are the loudest alarm bell. It hurts morale, trust, and retention almost immediately.
Statutory dues non-payment risks legal action and penalties that can snowball.
Creditors overdue looks like liquidity management at first, but piling up beyond 120 days can surface later as a sudden demand for cash or disrupted supplies while eroding suppliers’ trust.
| Particulars | May-25 | Jun-25 | Jul-25 | Aug-25 | MoM Change | Risk Indicator |
| Salaries Payable | 8,00,000 | 12,00,000 | 15,50,000 | 20,00,000 | ▲150% | 🚨 >2 months unpaid
Morale & attrition risk |
| Statutory Dues Payable | 4,00,000 | 6,50,000 | 9,00,000 | 11,50,000 | ▲188% | ⚠️ Rolling >2 months
Non-compliance |
| Creditors Payable | 32,00,000 | 38,00,000 | 42,00,000 | 47,00,000 | ▲47% | ⚠️ Overdue >120 days Supplier risk |
Closing Thought
MIS is not about “checking the box”
It’s about reading between the lines, understanding not just what the numbers say, but what they mean.
At Auxano, we’ve learned that when data talks, you must dissect it. The signals are always there — sometimes hidden, sometimes obvious — but never to be ignored.
Author,
Mansi Handa
