You have a great plan, fantastic presentation, good financial mode, a team, which can scale up the business
You have a great plan, fantastic presentation, good financial mode, a team, which can scale up the business—all the ticks which are essential for the idea to grow and become sustainable. And in all of this, what gets ignored is the ‘Compliance‘ part.
It’s not uncommon to find that the ‘ books of accounts ‘ are not maintained. And if maintained, its in an excel sheet.
Statutory returns are not filed and if filed, in majority of the cases, there is a considerable delay, which comes along with a penalty in fines.
Then, we have a case where the amount deducted from the statutory payments are not deposited and used for Sales and Marketing purpose… Why?
Why complying with statutory compliance, is treated as a pain and not as a part of the eco-system which drives the business to grow.
And then the fire-fighting starts, when the funds are to be raised. The Investors then get into Due Diligence ( dd) and then the books are laid bare.
Skeletons start to come out and the blame game starts. Why the compliance part is not a ‘tick’ in the checklist, when the venture is started.
The fund raising process gets delayed. Then, an experienced professional gets hired to set right the ‘compliance’. And this again effects the sale process, now the cash flow is also a crunch?
Well..well… things only got murkier… And then the fund raising flops… many a times….. ( This is a worst case sceanrio)
Or, the valuation gets readjusted…..
Why cut corners on the essentials, when you know this can have an impact on the valuation.
There will be answers, for each of the point raised. But, the point is, why to give an opportunity to raise this q?
Having the accounting and compliance in place is a no-brainer.
And this is not something, which should be ignored and looked upon as ‘fait accompli’.Its not, having systems and process across the functions is an integral part of the business eco-systems.
