Vijaya Dashami Special | A 20-day business health check for promoters — from Dussehra to Diwali
By CA Surekha S Ahuja | Casahuja.com
Ravana burns in one evening. Business wealth doesn't.
It erodes slowly—through decisions postponed, warning signs explained away and problems everyone sees but nobody owns.
Record turnover, unpaid suppliers. Rising profits, rising debt. Decades of growth, yet the business still depends on one person. A tax issue ignored until the notice arrives.
From the outside, the business looks successful. Inside, the value on paper may be far greater than the wealth actually being created.
This Dussehra, find the heads before they find you. By Diwali, start defeating them.
The 10 heads of Ravana inside your business
1. Profit without cash
The profit and loss account shows a profit. The bank account disagrees. Cash is trapped in receivables, inventory and unadjusted advances.
Test: Can you explain, with numbers, where your profit went?
Act: Review operating cash flow, receivable ageing and inventory every month. Assign responsibility for releasing blocked cash.
2. Growth that destroys value
More branches, more orders, more borrowing, thinner margins. Turnover is not wealth. Profitable, cash-generating growth is.
Test: Before expanding, do you know the additional capital required, the margin earned and when the cash will return?
Act: Approve no major expansion without a funding plan, realistic cash-flow projections and an assessment of expected returns.
3. Customers using you as their bank
You pay employees and suppliers, then wait months for customers to pay. You are financing their business with yours.
Test: Which customers are consuming the most of your cash through overdue payments?
Act: Set customer-wise credit limits, weekly collection targets and escalation rules. A promise to pay is not a payment.
For eligible micro and small enterprises, delayed-payment provisions may also have income-tax consequences for the buyer. The applicable statutory conditions and exceptions must be checked before relying on this as leverage.
4. Borrowing that hides the real problem
Another loan. A bigger overdraft. More money from the promoter. The pressure eases, then returns—often larger.
Test: Is the borrowing covering a temporary timing gap or a recurring operating deficit?
Act: Prepare a rolling 13-week cash-flow forecast. Diagnose the cause before borrowing more.
5. Costs nobody owns
Excess stock, idle capacity, rework, freight and unnecessary overheads. Harmless individually, they can collectively eat away the margin.
Test: Can your finance team explain why margins have changed and which costs are growing fastest?
Act: Identify the major cost leakages, assign responsibility and measure actual savings—not merely proposed cuts.
6. One customer, one supplier, one person
Stability that rests on a single relationship is fragility in disguise.
Test: What happens if your largest customer stops buying tomorrow?
Act: Measure customer and supplier concentration, develop alternatives, document critical processes and build a second line of management.
7. Controls that exist only on paper
The same person initiates, approves and records transactions. Reconciliations remain pending. Stock differences are explained away.
Test: Could an unauthorised payment or inventory loss go unnoticed for months?
Act: Separate duties, set approval limits, reconcile independently and verify inventory physically. Investigate exceptions instead of normalising them.
8. Compliance deferred until the notice
A missed deadline, unsupported expense or incorrect tax position may look insignificant until interest, penalties, disallowances or litigation follow.
Test: Do you know your unresolved tax exposures, upcoming deadlines and the evidence supporting material tax positions?
Act: Maintain a compliance calendar with named responsibility and a separate register of unresolved issues, potential liabilities and corrective deadlines.
9. Family disputes waiting to happen
Ownership, management roles, remuneration, succession and exit expectations remain informal because nobody wants an uncomfortable conversation.
Then a founder retires, a shareholder dies or the next generation takes control—and the business becomes the battlefield.
Test: Could the business continue smoothly if a key shareholder were no longer available?
Act: Review ownership records, succession arrangements, decision-making authority and shareholder agreements with appropriate professional advice.
10. The promoter as bottleneck
Every decision waits for one person. Managers report activities rather than results. Financial information arrives too late to influence decisions.
The promoter remains busy, but the business cannot grow beyond the promoter's personal capacity.
Test: Can your business function effectively for 30 days without your daily intervention?
Act: Build a monthly management information system covering cash, receivables, inventory, margins, debt, compliance and major business risks. Delegate defined decisions and review measurable outcomes.
The 20-day challenge: Identify the Ravana. Act before Diwali.
Vijaya Dashami is the day to identify what is weakening your business. Diwali is your deadline to demonstrate that corrective action has begun.
Do not attempt to solve every problem in 20 days. Identify the three weaknesses posing the greatest threat to your cash, profitability or business continuity and act on them.
Days 1–5 | Identify. Review the ten warning signs. Select your three highest-priority risks and quantify their financial or operational impact.
Days 6–10 | Assign. Name a responsible person for each risk. Set a measurable target, a deadline and the authority needed to act.
Days 11–15 | Execute. Begin collections, address avoidable working-capital blockages, correct control weaknesses and act on overdue compliance issues.
Days 16–20 | Verify. Compare results with the starting position. Record what improved, what remains unresolved and which decisions require the promoter's intervention.
| Risk area | What to measure | Diwali target |
|---|---|---|
| Overdue receivables | Cash collected against the recovery plan | Demonstrable collection progress |
| Excess inventory | Value of slow-moving or avoidable stock | Measurable reduction or a documented disposal plan |
| Funding pressure | Forecast cash gap | A credible, funded cash-flow plan |
| Cost leakage | Actual savings against the baseline | Verified savings or corrective action |
| Compliance exposure | Open issues and approaching deadlines | Documented action on priority exposures |
| Promoter dependency | Decisions delegated and completed | Reduced unnecessary escalation |
Do not count meetings held. Count what changed.
Some problems will take longer than 20 days to resolve. That is acceptable. What is not acceptable is reaching Diwali without ownership, a deadline or evidence of progress.
The Diwali test is simple: What has improved, what risk has reduced, and what remains to be done?
CA S. Ahuja Perspective
The most dangerous business risks are rarely hidden. They sit in plain sight—in the ageing report, the rising debt, the unexplained margin decline, the unsigned agreement or the unresolved compliance issue.
They survive because the promoter is busy with the next order, the next expansion or the next funding round.
But growth and strength are not the same thing.
The real test is whether your business can generate sustainable cash, earn adequate returns, meet its obligations, withstand disruption and protect the wealth its owners have worked to create.
This Vijaya Dashami, do not ask only how much your business has grown.
Ask what could destroy that growth—and which decision you have been postponing.
You do not need to defeat all ten heads today. You do need to stop ignoring them.
By Diwali, make sure at least one of your business's most dangerous weaknesses is being decisively addressed.
Because the real victory is not burning an effigy for one evening.
It is protecting the value you have built, one business decision at a time.
Casahuja.com | Practical tax, finance and business advisory for promoters and enterprises.
