In this episode, former CFO and current CEO of Brevis, Amit Dass discusses the important relationship between the CEO and CFO especially as CFOs are more involved than ever in every stage of the M&A process – from due diligence to integration.
In this episode, former CFO and current CEO of Brevis, Amit Dass discusses the important relationship between the CEO and CFO especially as CFOs are more involved than ever in every stage of the M&A process – from due diligence to integration.
Welcome to Finance to Futurist, a Sidetrade podcast series on how innovation data and AI are disrupting order-to- cash.
Natalie Silverman:Hi, this is Natalie Silverman for Sidetrade. Welcome to Finance to Futurist. On today's episode, we're discussing the important relationship between the CEO and CFO, especially as CFOs are more involved than ever in every stage of the M&A process from due diligence to integration. Please welcome former CFO and current CEO of Brevis, Amit Dass. Good morning Amit and thanks for sitting down for Finance to Futurist.
Amit Dass:Hey Natalie. Thank you for having me.
Natalie Silverman:All right. Well, it's great for you to join and would love to hear a little bit more about yourself first off, and also what your role is as CEO at Brevis.
Amit Dass:Great, okay, good. So my background over the last 20 years has been anything but linear. I started off in consulting, working at TELUS Willis Watson, and then cut my teeth into strategy before heading up finance at Dun and Bradstreet in a division of international partnerships. I also cut my teeth into M&A integration at that point as well, before moving into private equity in the last decade. And now as I said, it wasn't it's not been a it's not linear. It's I'm now CEO of a law firm called Brevis. Let me start by telling you a bit more about Brevis. We're a law firm specializing in residential law, what we call in the UK conveyancing, and we act for either the buyer or the seller in a transaction where there could be many house transactions in any single chain. And so the legal process of it has to be seamless as possible for a small firm of about 30 people now. And we're aiming to rapidly grow with a unique offering centered around our technology and our Client Services. Well, conveyancing as a sector has really been dogged by having the target poor customer service. So we need to change that, and change the way that our customers see it, and also how the sector is perceived as well.
Natalie Silverman:Awesome. Well, again, at Finance to Futurist we love to bring different people with different perspectives. And so love that you're a CEO, again, in a law firm specializing in real estate. So we'll love to hear just more about your role as a CEO. I know you interact with a lot of people on a day to day basis. But just maybe you could talk a little bit first about how you interact day to day with your CFO, and how that relationship has been built? And how do you create a better partnership with the CFO and the leadership team?
Amit Dass:So given I've been a CFO and prior to being CEO, I think that's a really interesting question. For me, I don't believe there's a closer relationship. You can happen any two roles within a business, there has to be trust, that's imperative between the two roles and alignment in the overall strategy as well, to me, it doesn't mean that the CFO should just be aligned with everything that CEO says, but apart from it, but it should be there to challenge his assumptions challenged his strategy around the business as well. And a good CFO will look assess business cases for ROI over a time horizon and provide their assessment, you know, towards value creation is definitely a double act. I think also, as well as when you're growing your business where as we are, it's really important that they have to be completely aligned in terms of managing capital, and making sure we don't overspend on investments at critical times of a growing business.
Natalie Silverman:So talk to me a little bit about inflation, because obviously, that's on everybody's mind today. And as a CEO, and obviously somebody that's really familiar with the finance function, what are some of the steps that you're taking at Brevis, to protect your business from inflation.
Amit Dass:So actually, that is very common topic, especially in the UK, where, you know, patient is very high. I think that's one of the first things I did when I came into this, assessing the P&L, looking at some of our vendor contracts, and also looking at where there's gonna be some pain points, what we found is that recruitment is getting way more expensive. Now, it's really difficult to find talent to the right salaries that we're looking for as well. Vendor costs are increasing rapidly, their costs have been passed on to us and so forth. So in the short term, since I've been at Brevis, I think what we've done is looked at our some of our bigger vendor contracts, and actually seeing if we can negotiate longer term contracts with lower annual price increases stuff, the first thing, also cash is imperative, looking at our cash on a regular basis, so looking at our debtors, looking at our creditors, making sure that we're being paid on time, because that's really important too. And with regard to recruitment, as well, it's important that we retain our staff salaries, one thing when we're in terms of retaining talent, but looking at other things, other perks that we could do other benefits that we can do to make sure that we retain our staff, because you know, P&L I'm sure with most if the salaries are about human capital, knowing the most expensive part of our cost base as well. So it's an ever changing situation. But that's the dairy that we're looking at right now. And how are we trying to combat it.
Natalie Silverman:Well, I have to say thank you for the shout out to accounts receivable. We know cash, obviously is the lifeblood of any company. So why don't we switch gears a little bit because I know you and I have worked together previously and you played a really big role when it came to mergers and acquisitions. So I thought it would be really interesting today to spend some time talking about the role that the finance team plays in m&a. And again, how does the M&A process impact the finance team overall?
Amit Dass:Okay, so finance totally pivotal at the start of any M&A process, they're always there from day one. If we have a standalone business today, and we're looking at buying another business, they've got to let us help us assess what the company's p&l looks like with the combined entities and operating plan. And the strategy that goes with regard to an acquisition should be translated to a financial pro forma for the new cap. That way we're going to look at what would it look like in the new business with all the synergies revenue generation opportunities that ensure there is a viable ROI with this opportunity over a certain time horizon? I think that when you're looking at m&a that they're right at the start, when helping you build out that strategy. How can you with the due diligence? And ultimately, how can you integrate the business as well? So across all three areas of the acquisition lifecycle.
Natalie Silverman:So you mentioned due diligence, so how do you think firms should approach the due diligence process?
Amit Dass:Right, okay. So my way is always making sure that you use the team that you've got within you, because we've got subject matter experts across marketing across across sales across technology, those people within your within your leadership team are there to provide the guidance on that particular function. So my view has always been, they've already got a role. This is an add on to their role than any any M&A Is that added to their role, make things easier for them, as an IT say an Integration Manager or integration leader would want to create a template for each SME to critically assess that business. And also, when they look at the corresponding documents in the data room, it's important to take a holistic approach when doing this. So basically, you're gonna look at all the interdependencies something that a finance person would look at in due diligence would also translate into something that an HR person would look at as well. So making sure that you look at this across the whole prism of the business, that's super important as well. And planning this out, because it usually due diligence is done in a really finite amount of time, because obviously, you're trying to get the deal done. So making sure you plan all this in advance and make sure you have all the right templates in place and review points, which happen weekly, daily, whatever to check in with your team as well, it's important to make sure you're not losing any focus across the table.
Natalie Silverman:How about the idea of bringing in outside help? I know that's kind of a controversial statement. But you know, when is the right time to bring in outside help to supplement maybe the subject matter experts that you have internally.
Amit Dass:So I've been in processes where we've used outside help, I've been in process where we haven't. And there's a common theme with regard to whether you do that, I think it's usually down to the size and the complexity of the deal. Any deal of size, we normally puts a strain on the current management team. And also it's also about assessing the capability and skills of your management team skills, whether they you need outside help, if you think of certain areas, look at IP law, areas of technology. And it depends on the company you're acquiring. So if there's something that you're not familiar with, and you're moving into a different domain, definitely look at getting outside help, because there's no quicker way to lose money than making the wrong acquisition.
Natalie Silverman:How about you know, you talked a little bit about integration. So let's talk about after the M&A and after the company has kind of come together? Because integration is so important. So how should you drive integration after an acquisition? Where are some of the areas that you start with first?
Amit Dass:Integration should always start during the due diligence process. That is a key connector with any integration as well, because you're starting to plan out your integration at that point, here are the things that we think we need to do, you know, that we're going to execute on once the deal is done. Because if you don't plan it in advance, then it's not going to be so difficult, what's the deal has been done. So it's going to be in phases, the planning phase, translating the due diligence into an integration playbook, looking at those interdependencies in the integration process as well, looking at where we can find synergies, process improvements and revenue generating opportunities. And then once the deal is done, you're going to have this playbook which is ready made now. And then you can execute on it. The other thing as well as to make sure that actually you need to do this, I'd say in line with with the actual acquired company as well. So take into account their their specialist skills and make sure that actually, while the integration playbook might be fully formed in one way, when you're speaking to the other side, to make sure they've got great ideas, in terms of how we integrate the business to so make sure you keep those things in line as well.
Natalie Silverman:You know, one thing of being on the other side, right, as a vendor, and sometimes when we listen to our enterprise prospects and clients, you know, we hear that they're in the middle of an acquisition or they're being acquired. And you know, for them, they have all these overlapping systems and different ERPs. And, you know, sometimes people think, well, this is not the right time to think about a new solution. But in other cases, it really is the right time to almost unravel. Right, and to see where there might be synergies or might be areas of redundancy as well. So how would you pursue that when it comes to technology and thinking about, you know, one tech stack or from your experience, how do you tackle that technology question?
Amit Dass:So that's really a great question is I don't think there's one hard and fast rule with this, unfortunately. Main thing is really see what what you're willing to do because the technology stack is one going to be expensive, too, it's going to be very time consuming. Now, in an ideal world, you'd want one technology stack, but you've got to look at what you're willing to integrate what you're willing to invest in to drive efficiency in the long term, it depends on your on your time horizon as well. So if you're a PE fund, you normally have a five year time horizon. And if this if this is a deal that you've done subsequent to your first one, you might be only have three years, for example, to drive the integration and try and find synergies and be more efficient. So it may not be the ideal time to do that. So it might be on to the next acquire to do that. So there's a number of decisions to you know, to make before you could do that. But nothing's always ideal. You got to go with what you think is the right thing to do over your time horizon.
Natalie Silverman:Perfect. So you know, and I think that's great advice, because you can boil the ocean when it comes to M&A. You know, so my last question I'm at is just, you know, what are some last minute tips that you have for CFOs? Again, looking to potentially pursue M&A.
Amit Dass:Alright, so these are probably lessons that I probably learned when I was a CFO and make sure I had that same relationship with my CFO as well. I've seen CFOs being too conservative in M&A. Previously, reject deals or challenge them too much when they when they don't see immediate synergies. While it's good to have that viewpoint, synergies can be sought over a period of time, I think it's always good to look at how new business could generate more top line revenue as well. Because if you look just look at it from a cost cutting point of view, there's going to be a limit to cutting costs eventually and and I know from experience that you can only cut so much and it's better to look at revenue generating opportunities. So I think a strategic CFO will be looking at the top line as well as the bottom line.
Natalie Silverman:Thanks Amit for your insights into the future of finance. For Sidetrade, this is Natalie Silverman.
Conclusion:This has been another episode of Finance to Futurist, a Sidetrade podcast series. Make sure you catch every episode by subscribing to our podcast on Sidetrade.com or through your podcast platform of choice. Thanks so much for tuning in. This podcast is brought to you by Sidetrade, and is for general information purposes only. All rights reserved.