If you are a Practicing Chartered Accountant, you must have already started questioning your future in CA Practice at some level. Every practicing CA has their own reasons why they feel CA Practice is not as rewarding as they dream while pursuing the CA course. In this article, I am trying to list some of the issues each practicing CA must ponder upon and possible solutions.
Issues with Traditional CA Practice
No need to say the level of fees we are charging today compared to our efforts to complete compliance for the client. You will never see a single CA Firm charging fees as per the Minimum Recommended Scale of Fees for the Professional Assignments issued by ICAI.
Moreover, in Tier II and III cities, the client used to pay fees months after completing assignments. Due to this, CAs are targeted most by NBFCs for overdraft facilities for working capital loans.
Lastly, constant changes in the law make the client reach out to CAs with queries, and most CAs don’t charge for this consulting. This causes a massive loss of time for the CA Firm, a limited commodity the professional has to generate revenue.
With various departments’ recent rigid stance on deadline extension, the ultimate heat is on CA Firm. Long working hours around deadlines usually cause health problems for Chartered Accountants.
The inefficiency on the part of the client creates an additional workload for CA Firms with stiff deadlines. CA firms need to educate clients to provide timely records for compliance.
Although the timely deadline is a blessing in disguise if CA Firm utilizes slack period time in new opportunities. Read “How Can CA achieve 10x Growth in income with No Due Date Extension?” for more details.
As an unspoken agreement with the client, every CA Firm has taken the entire responsibility for the client’s timely and proper compliance for their smooth business operation.
Due to this, CAs are often soft targets by authorities when some irregularities are found in clients’ compliance. The CA involved in any matter will be the first to arrest in case of scam is unearthed.
Lastly, all of the above has made CAs limelight for Newspapers and News Channels’ sizzling headlines reporting such incidence. And the CA community is losing its reputation amongst clients and the general public at large.
A significant share for a CA Firm is regulatory compliance for clients. For non-audit compliance, other professionals provide such services at a much lower fee. Due to this, CAs are forced to lower their fees further or lose the client.
Also, with ease of compliance with technological advancements like filing the salaried return, many clients themselves complete their compliance without the help of a Chartered Accountant.
And lastly, startups are booming to automate such compliance for clients at a fraction of the fees of Chartered Accountants. So the future is very challenging for practicing Chartered Accountants as a huge pie of their work is taken away due to all these competitions.
Most CA firms rely only on compliance work as their mainstream income. The reason is their clients are not willing to consider any other services a Chartered Accountant can add value through in the Growth of their business.
A Chartered Accountant can help clients in Cash Flow Management, Forecasting & Budgeting, Cost Control, KPI Tracking, Growth Mentorship, E-commerce, Process Optimization, Market Research, Project Management, Risk Management, etc.
However, most of the client base is unwilling to change their internal work culture and take the above services for the Growth of their business to the national level or even to international markets.
The number of CA Firms is growing multifold compared to available empaneled opportunities like Statutory Bank Branch Audits. The result is less and less allotted empaneled work for CA Firms.
Moreover, the scope of work in the statute is getting limited day by day due to the digitalization and centralization of records within departments. For example, removing the GST Audit and Tax Audit requirement for lower Turnover businesses.
The last nail in the coffin was the inclusion of other professional bodies where the CA had ultimate authority. Professional bodies like The Institute of Cost Accountants of India are already in the process of getting their share in various compliance requirements by submitting representation to the Government.
Loss of ICAI Authority
Have you ever seen elected RCM and CCM taking any proactive action to reach you after the election? They may not even be taking action behind the stage to secure ICAI members’ interests. They are just busy securing their interests and their kin’s interest.
Most of the development we see in ICAI is opening foreign branches and launching new websites every time. They start from scratch on their ideas rather than building on development by past committees.
The result – NFRA, in its consultation paper, has suggested relieving Micro, Small, and Medium Companies (MSMCs) from the annual statutory audit. And the birth of a competing body to ICAI, i.e., the Indian Institute of Accounting (IIA).
Chartered Accountants cannot wait for someone to help them in their Growth. Therefore, CA Firms should diversify their practice area and look for clients looking for their skills as Chartered Accountants.
One of the promising areas is Outsourcing Practice. Visit https://www.smartcapractice.com/webinar33269112 to watch a 37-minute FREE online webinar on “How to Start Outsourcing Practice within 90 Days!! Even if you are starting from scratch with No Experience!!”
Also, do read my other blog articles on various topics at https://www.smartcafirms.com/ca-firms-blog/.
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