In a centralized corporate office managing a diverse conglomerate, the corporate finance team functions as the strategic decision maker and supervisory hub. While BU heads and MIS managers handle their respective entities, the corporate-level team focuses on consolidation, capital allocation, and risk management across the entire group.
Some of the key roles include:
- Standardization: While each business unit prepares its own financials, corporate ensures they follow a common chart of accounts, policies, and timelines.
- Consolidation: Merges unit-level reports into a single group-wide financial statement, eliminating inter-company transactions.
- Uniform Policy: Defines rules for depreciation, revenue recognition, provisions, and other accounting treatments to avoid inconsistencies.
- Regulatory compliance: Oversees adherence to tax laws, statutory filings, and audit requirements across states and jurisdictions.
- Tax compliance: Ensure compliance with multi-state tax regimes, GST, and transfer pricing rules.
- Performance management: Corporate compares unit performance against budgets, forecasts, and industry benchmarks, to ascertain the problematic areas.
- Centralized treasury: Corporate manages group-level borrowing, cash pooling, and foreign exchange risk, allowing the units to focus on operations.
- Investment decisions: Decides which unit gets funding for expansion, based on ROI and strategic fit.
- M&A support: Leads acquisitions, due diligence, and integration, with operational input from business units.
- Audit coordination: Corporate ensures internal audits and stat audit findings are escalated to leadership for corrective action.
- Liaise with banks, financial institutions, and solicitors for funding, compliance, and legal matters.
- Implement hedging strategies for foreign exchange and commodity risks.
- Oversee insurance coverage for plants, warehouses, and logistics.
MIS Generated for Senior Management & Board
The corporate office Consolidates BUs level data into high-level MIS reports for the Board:
- Group Dashboard: Real-time visibility into the revenue and profitability of all different companies and product lines.
- Capital Allocation Efficiency: Reports on which business units are generating the highest returns relative to the capital invested in them.
- Liquidity & Solvency Profile: A group-wide view of cash reserves and long-term debt obligations.
- Exceptional MIS: Highlighting BUs that are significantly underperforming or deviating from the approved budget
Compliance Reporting
The corporate team ensures the entire group adheres to statutory compliance
- Group FS Consolidation : Preparing consolidated financial statements as required by the Accounting Standards (Ind AS) and Companies Act.
- Taxation: Managing group-level TDS and GST reconciliations to ensure no inter-company transaction gaps. (ie No discrepancies between the financial records of two related entities)
- Treasury & FEMA: Reporting foreign investments and cross-border transactions to RBI
- Banking Covenants: Providing quarterly compliance certificates to lenders to prove the group meets agreed-upon financial ratios.