Sector: E-Commerce
Founded: 2007
Valuation: $35 billion (2024)

Company Overview: Flipkart is one of India's largest e-commerce companies, launched in 2007. It grew rapidly, becoming a household name and attracting significant investments, eventually being acquired by Walmart in 2018.

Challenges encountered:

• During its rapid expansion, Flipkart faced significant challenges in managing its finances due to a high volume of transactions and the complexity of its supply chain.
• Fraudulent transactions, inventory mismanagement, and cash flow mismatches became growing concerns as they scaled.
• Adhering to complex tax regulations, accounting standards, and e-commerce specific guidelines was a significant challenge.

Solutions Implemented:

• Flipkart implemented stringent financial controls by integrating ERP systems to centralize its operations. This allowed real-time tracking of cash flows, inventory, and accounts receivable.
• It introduced segregation of duties, ensuring different teams handled approvals, payments, and audits, thus minimizing opportunities for fraud.
• Flipkart also established internal audit committees to regularly review financial operations, identifying inefficiencies and areas where controls could be improved.
• They established robust internal controls to prevent fraud, ensure compliance, and safeguard assets. These controls included segregation of duties, regular audits, and employee training.
• Employees training programmes were conducted on financial regulations, ethical conduct, and fraud prevention.

Outcomes Attained:

• Through strong financial controls, Flipkart significantly reduced financial discrepancies and fraudulent transactions.
• The company improved its cash flow management, allowing it to invest further into expanding its logistics and supply chain.
• By building financial transparency, Flipkart was able to attract investors such as Tiger Global and SoftBank, culminating in a $16 billion acquisition by Walmart.
• By adhering to regulatory requirements, Flipkart avoided penalties and maintained a positive reputation.

The strengthened financial controls supported Flipkart's continued growth and success.