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Case Studies
How we helped PFI transform its poultry operations by strengthening financial controls, enhancing compliance and achieving 40% growth despite industry challenges.
About
Our client, PFI operates in the poultry and food processing industry, managing the production, refining, freezing and distribution (including export) of poultry products while strictly focusing on compliance and operational efficiency for long-term growth.
Quick glance at the challenges and solutions
Before we dive deep into the entire case study, let us take a quick look at the challenges the client faced and the solutions MSA provided. From managing financial constraints and tax complexities - to stepping in with structured financial controls and proactive tax compliance strategies for a sustainable growth.
The Challenges
- Limited financial resources: The client found it difficult to allocate funds effectively while managing day-to-day poultry activities.
- Lack of structured financial controls: Without a cost center-based accounting system, it was challenging to track expenses and establish budgets.
- Complex tax compliance requirements: Frequent audits and assessments from tax authorities (Income Tax, GST, Service Tax) added pressure to their operations.
- Regulatory risks and legal hurdles: Ensuring timely tax filings and avoiding penalties was always a constant struggle.
- Cash flow challenges: Managing debtors, creditors and liquidity remained an ongoing concern.
The Solutions
- Introduced structured financial controls - We setup a cost center-based accounting system, making it easier for the client to track expenses and plan monthly budgets.
- Provided monthly MIS reports - This gave the client real-time financial insights, allowing them to effectively monitor cash flow, income and expenses.
- Strengthened tax compliance - We ensured timely tax filings, thereby reducing compliance risks by 90% helping them avoid penalties.
- Offered litigation support - Our tax experts handled legal disputes, managing all audits smoothly to prevent any disruptions.
- Improved cash flow management - By offering aging analysis for debtors and creditors, the client achieved better control over collections and payments.
The Results
MSA managed audits, handled all tax filings, took care of litigations and created financial controls, for compliance and sustained growth in the poultry industry.
90%
Compliance Risk Reduced
3.5x
Operational Growth
2.8x
Increased Cash Flow
100%
Audit Readiness
15%
Reduced Tax Liabilities
18%
Increased Gross Profit Margins
A deeper look into the case study
Client Background & Early Challenges
Our client PFI is from the food and poultry industry, handling production, processing, freezing and trading of poultry products. They started as a small poultry firm with limited financial resources, while aiming for long-term growth. However, they had to face several challenges that slowed down their progress.
One key issue was with the financial management - side of things. The company lacked structured expense tracking, cash flow control and cost allocation.This made it hard to assess profitability across different production stages. Budget overruns were common and financial decision-making was reactive instead of being strategic.
Tax compliance and regulatory filings was another area of concern. With regular audits and tax assessments from Income Tax, GST and Service Tax departments, meeting filing deadlines, managing litigation and avoiding penalties became quite overwhelming.
Scalability was difficult without strong internal controls, structured financial processes and proactive tax planning. Growth opportunities were limited by inefficiencies in compliance, accounting and cash flow management.
With these financial and compliance challenges holding back growth, PFI needed structured processes and expert guidance. MSA stepped in to streamline accounting, enhance tax compliance, implement cost controls and setup efficient financial systems. This was to ensure smooth operations, audit readiness and a strong foundation for future expansion.
Solutions That Delivered Results
To address our client's challenges in the poultry industry, here is how our industry-specific solutions helped them enhance efficiency, maintain regulatory compliance and drive sustainable growth:
1. Cost Center-Based Financial Management
We setup a cost center-based accounting system, allowing our client to track poultry production costs, allocate expenses effectively and optimise financial decision-making for each operational unit.
2. Tax Compliance and Audit Management
We ensured that GST, Income Tax and regulatory filings were done on time, which reduced compliance risks by 90%. Our proactive audit support helped PFI to successfully clear 100% of tax assessments without penalties.
3. Debtors and Creditors Management
To improve cash flow, we introduced aging analysis for debtors and creditors.This ensured faster collections, optimised payment cycles and better liquidity management for poultry procurement and processing.
4. Monthly MIS and Financial Reporting
We delivered monthly MIS reports, giving PFI detailed insights on revenue, expenses and cash flow. This helped them with data-driven decisions and prevent financial bottlenecks in poultry operations.
5. Litigation and Dispute Resolution
With frequent tax assessments in the poultry industry, we handled litigations, represented PFI in hearings and resolved disputes efficiently. This ensured that their business continued without any regulatory roadblocks.
6. Budgeting and Cost Optimisation
We developed a structured budgeting system, helping PFI cut operational costs by 25%. This improved their resource allocation and allowed them to maintain profitability despite industry challenges.
7. Loan Restructuring and Debt Advisory
To ease financial strain, we assisted in loan restructuring, renegotiating terms with lenders and improving liquidity, ensuring stable poultry supply chain financing.
8. Inventory and Stock Management
We optimised inventory controls, reducing perishable poultry stock wastage by 30%, improving storage planning, procurement cycles and cost efficiency for frozen and processed products.
9. Regulatory and Food Safety Compliance
We aligned PFI's operations with food industry regulations, poultry processing standards and tax laws, for smooth operations and compliance in a highly competitive market.
Interesting Stories
From bird flu to tax audits - the unexpected adventures of working with PFI.
One of the most challenging moments we faced while working with PFI was during the Bird Flu outbreak. The poultry industry is highly sensitive to such events and when the news of such an outbreak spread, it led to a sharp drop in demand for poultry products, causing supply chain disruptions and financial uncertainty.
PFI found itself in a very difficult situation. Consumers were avoiding poultry products, due to which sales declined sharply and the company was left with unsold inventory - not to mention the operational expenses piling up. Following this, payments from distributors slowed, which affected the cash flow - while operational costs continued to rise.
During this crisis, our role was extended beyond just financial advisory - we became strategic partners, guiding the client through uncertainty. One of the first things we did was assisting our client in restructuring PFI's loans. So we started negotiating with financial institutions, modified repayment terms which freed up cash for essential operations. We also revisited budget allocations and put a control on non-essential expenses, so that the business could weather the downturn.
At the same time, we worked closely with PFI's management team to analyse the cash flow projections and to prioritise payments. This ensured that their suppliers, employees and operational expenses were taken care of. By closely monitoring the financial data, we helped our client make informed decisions on inventory management, vendor negotiations and short-term liquidity solutions.
Despite facing all these challenges, PFI emerged from the crisis as a strong winner, with a more robust financial plan and better risk management strategies in place. This experience underscores the importance of our close partnership with the client - that is - it goes beyond numbers; it is about being there when they need us most.
One of the most demanding yet the most learning experiences we had was, managing their frequent tax audits and litigations. As a growing company in the poultry and food processing industry, PFI had to face numerous tax assessments from various authorities, including Income Tax, GST and Service Tax departments. These audits often resulted in unexpected financial liabilities, operational stress and lengthy legal processes.
We can remember one specific situation, when PFI faced a particularly challenging audit, where tax authorities started questioning some of their past filings and sought additional clarifications. This entire situation was a little overwhelming for the client to handle, as they had to balance on-going regulatory inquiries, along with the need to run daily operations smoothly.
Understanding the urgency, we immediately stepped in as PFI's financial and legal support team. We looked at their historical tax records to identify potential discrepancies. This helped us built a very solid case to support their compliance efforts. We also worked directly with tax authorities to negotiate fair resolutions, ensuring that PFI avoided hefty penalties and unnecessary financial strain.
Additionally, we also introduced a structured tax compliance system, to make sure that all future filings were error-free, met the deadlines and considered all regulatory changes. This proactive approach significantly reduced PFI's audit risks by 90% and gave the management peace of mind.
When we look back, this experience reinforced - how our deep involvement in PFI's business helped them stay compliant and financially secure, no matter how tough the regulatory landscape was.
The Results
Final Outcomes and Business Impact
Our efforts in financial structuring, tax compliance and cash flow management helped PFI overcome its challenges and achieve stability in the poultry and food industry. With better cost tracking, improved audits and strong internal controls, the company scaled its operations, reduced financial risks and strengthened compliance. Here is what we achieved together:
90%
Compliance Risk Reduced
Reduced compliance risks by 90% with timely tax filings and through proactive audit management system.
3.5x
Operational Growth
Business operations multiplied 3.5 times over a period of 5 years, despite facing industry challenges.
2.8x
Increased Cash Flow
Accounts receivable turnover was improved by 2.8x, for better cash flow and liquidity management.
100%
Audit Readiness
Achieved 100% audit clearance toavoid penalties and also maintained a clean record with tax authorities.
15%
Reduced Tax Liabilities
Reduced tax liabilities by 15% through optimised financial planning and timely compliance.
18%
Increased Gross Profit Margins
Gross profit margins improved by 18% with better financial controls and expense tracking.
Final Thoughts
Our partnership with PFI has transformed its poultry processing and distribution business into a financially secure and regulatory-compliant operation. As the poultry and food processing industry continues to evolve, we remain committed to supporting PFI with ongoing financial guidance, compliance monitoring and operational efficiency strategies to help them adapt, compete and grow sustainably.
Note:
As per the advisory issued by ICAI – The Institute of Chartered Accountants of India, we follow their Website Design Guidelines (given below). Hence, we are unable to disclose our clients' full names on our website and have instead used abbreviations. If you require detailed information about our clients, please contact us.
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