Chief Financial Officer / India
The total was not the whole account
- Finance colleagues
- 27
- Four managers; ₹4.8 crore annual function expenditure
- Company revenue
- ₹126 crore
- FY2025–26; ₹18 crore operating profit
- Finance experience
- 30 years
- Engineering-services accounts to software CFO
Decisions & consequences
01Separating qualifying development from the programme around it
A 2023 product programme incurred ₹3.6 crore and was presented for review under one development heading. The supporting work included early investigation, maintenance of existing functionality and a defined development stage. The initial finance schedule proposed capitalising the full amount. Product colleagues had used one programme code because the work belonged to a common commercial objective, but that did not establish that every activity had the same accounting characteristics.
I asked the controller and product director to reconstruct the activity record and the dates at which relevant evidence became available. We obtained qualified accounting review and discussed the basis with the auditors. The review supported ₹1.4 crore for capitalisation under the company's applicable policy; ₹2.2 crore was expensed. The example describes this fictional programme's assessed facts, not a rule that a fixed percentage of software expenditure should be capitalised. The team retained the supporting decisions and considered the asset's subsequent treatment separately.
The change reduced the amount initially proposed as an asset and increased current-period expense relative to that proposal. It did not alter the ₹3.6 crore already spent, recover cash or prove that the expensed work lacked commercial value. I explained those distinctions to the CEO and board because there was understandable disappointment that productive work did not all appear in the same way in the accounts. Product leaders continued to own the roadmap; qualified finance owners remained responsible for the accounting conclusion.
We spent ₹14 lakh improving the records and review process over six weeks. Future programme approvals now describe the activities and evidence expected rather than use a single label as a shortcut to treatment. I also accepted that finance had helped create the original ambiguity by asking for a programme total without clarifying the underlying distinctions. The correction was useful only if it changed that conversation, rather than produce a one-off adjustment that the next product team would repeat.
Removing new customers from a retention headline
A management presentation in 2024 described annualised subscription value rising from ₹84 crore to ₹98.6 crore as 117.4% retention. The ending total included ₹19 crore from new customers. Within the opening customer group, losses and reductions were ₹13.4 crore and expansion was ₹9 crore. The arithmetic behind the total was correct, but the label implied that existing relationships had grown more strongly than they had.
I asked finance and commercial operations to rebuild the account from the opening cohort. After losses and reductions, ₹70.6 crore remained, giving gross retention of about 84.0%. Adding expansion produced ₹79.6 crore, or about 94.8% net retention. New-customer value then brought the overall annualised total to ₹98.6 crore. These were defined management measures of recurring contract value, not recognised revenue or cash receipts. The same population and period were used throughout the comparison, with rounding stated.
The commercial team was concerned that the correction would overshadow a successful new-business effort. I agreed that the ₹19 crore deserved its own explanation. I did not agree that new sales should repair the description of existing-customer continuity. We replaced the retention headline with a bridge showing the four movements and reviewed the reasons behind the ₹13.4 crore reduction. Product and customer leaders took responsibility for the response; finance did not infer from the percentage alone that every loss had the same cause or remedy.
The reconciliation and reporting change cost ₹9 lakh and took four weeks. We restated the comparable management presentation and explained the correction to directors. It produced no immediate cash saving and did not reverse customer losses. Its value was a more honest investment discussion: the company could grow overall while its opening subscription base contracted. I would establish the cohort and name of the measure before a percentage enters an executive presentation, rather than rely on a familiar term to make an unfamiliar calculation seem self-explanatory.
Putting the acquisition's conditions beside its price
In 2025 we considered acquiring a small software capability for ₹8 crore upfront and up to ₹4 crore linked to specified future customer outcomes. The investment paper called it a ₹12 crore acquisition and concentrated on the maximum price. Separately, the operating team expected ₹1.1 crore of integration expenditure. That cost had not entered the transaction's funding schedule because it was classified as future operating work rather than purchase consideration.
I asked the team to separate the decisions. Legal advisers clarified the proposed conditions and evidence for the contingent payment. Product and people leaders estimated integration activity, timing and responsibility. Finance prepared a cash schedule for the ₹8 crore immediate payment, scenarios for the additional amount and the planned ₹1.1 crore integration spend. The result was a maximum identified outlay of ₹13.1 crore under the stated assumptions, not a claim that all of it would become payable on completion. Tax, transaction costs and any other adjustments required their own review rather than being silently treated as included.
The board approved proceeding only after the paper showed these distinctions and the operating owners accepted the integration plan. We incurred ₹22 lakh of due-diligence expense before the decision, reported separately. The final agreement preserved measurable conditions for the additional payment and a process for resolving differences in their assessment. I did not set the technical acceptance criteria myself or treat the conditional amount as certain profit for the seller or certain expenditure for the buyer before the contractual tests were met.
The case changed how we follow a transaction after approval. A named finance manager now maintains the payment-condition record with legal and operating colleagues, while the integration budget has its own owner. The purchase headline remains useful shorthand only when the underlying schedule accompanies it. I would ask early which amounts are certain, which depend on future evidence and which are needed to make the acquisition work but sit outside its price.