RisksandRewardsofPractice:

AGuidefornewandYoungCAsinPractice

A Presentation by CA Nilesh S.Vikamsey

APresentationbyCA.Nilesh
S Vikamsey
Risks and Rewards of Practice

Agenda
g
Setting the context
S i i
Statistics
Practice V/s Industry
Emerging areas
Major challenges in practice
Strategies and thought process for practice
Growth Strategies

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

SettingtheContext

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

SomeFactsandStatistics

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

CompositionofCAMembers
p
Practice Vs Industry
Category

Total Members

Members in
practice

Members in
Industry

Members in
practice (%)

Members in
Industry (%)

31 D 12
31-Dec-12

90,590
90
590
83,244

11,14,236
14 236
1,09,269

44%

56%

31-Mar-12

22,04,837
04 837
1,92,513

43%

57%

31-Mar-11

1,70,610

76,453

94,157

45%

55%

31 M 10
31-Mar-10

1 61 516
1,61,516

73 462
73,462

88 054
88,054

45%

55%

31-Mar-09

1,53,600

70,362

83,238

46%

54%

31-Mar-08

1,45,481

68,979

76,502

47%

53%

31 M 07
31-Mar-07

1 39 841
1,39,841

68 944
68,944

70 897
70,897

49%

51%

31-Mar-06

1,30,946

68,026

62,920

52%

48%

Source: ICAI Annual report

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

CompositionofSMP
p
Particulars
Proprietary
p
y
Partnership
Partnership up to 5
P t
Partnership
hi up to
t 5-10
5 10 partners
t
Partnership up to 11-15 partners
Partnership
p upp to 15-20 p
partners
Total Partnership
Total Firms

Numbers
34,462
,

%
71%

12,866
1 143
1,143
151
49
14,209
48,671

26%
2%
1%
0%
29%
100%

Source: ICAI Statistics data

CCBCAF & SMP Committee of ICAI www.icai.org.in
Source: ICAI Statistics of 2012

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

CompositionofSMP(InMumbai)
p
(
)
No. of Partners No of firms No of partners

20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
TOTAL

7
5
2
1
1
4
5
14
15
7
9
20
23
39
73
148
362
735

140
95
36
17
16
60
65
168
165
70
81
160
161
234
365
592
92
1,086
3,511

Source: ICAI Statistics of 2012

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

DemographicsofSMPs
g p
Availability of SMPs
Partnership Firms
Sr. no

Places

Proprietary Firms

Numbers
1
2
3
4

Metro cities i.e. Delhi, Mumbai, Chennai,

Kolkata.
State Capitals (other than metro cities)
Quarter ((other than 1 & 2 above))
District Head Q
Other rural areas (other than all above)
Total

11,355

No. of Firms
Numbers %

33%

3,611 10%
15,409
,
45%
4,087 12%
34,462 100%

5,380

No. of
partners
Numbers

Total
No of
members
in Pratice
Numbers

38%

17,940

29,295

2,185 15%
5,662
,
40%
982
7%
14,209 100%

7,316
16,517
,
2,688
44,461

10,927
31,926
,
6,775
78,923

Source: ICAI Statistics of 2012

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

GrowthofPracticingUnitsinIndia
49,000

48,357
48,000

Growth of Practicing Units in India

47,000

46,372
45,792

45,703
,

46 000
46,000

45,604
45,210

45,050

45,000

44,000

43,000
2005

2006

2007

2008

2009

2010

2011

(2011 data is till October 2011)

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

GrowthofProprietaryFirms
34,500

34,216

34 000
34,000
33,500

Growth of Proprietary Firms

33,000

332,697
,697

32,500

32,165
31,950

32,000

32,001

31,871

2008

2009

32,198

31,500
31,000
30,500
2005

2006

2007

2010

2011

(2011 data is till October 2011)

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

10

GrowthofPartnershipFirms
14,400

14,141
14 200
14,200
14,000

13,753
13,800

Growth of Partnership Firms

13,675
13 94
13,594

13,600

13,439
13,400

13,209

13,179

2008

2009

13 200
13,200
13,000
12,800
12,600
2005

2006

2007

2010

2011

(2011 data is till October 2011)

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

11

CampusPlacementScenario
p
Particulars

2012

2011

2010

19,365

15,692

6,042

7,504

No of interview panels

215

400

355

229

No of organizations

129

186

182

126

1,451

3,139

2,359

1,282

20%

39%

17%

Number of Candidates Registered

Number of Jobs Offered

% Of jobs offered vis a vis no
of candidates registered

7%

2009

Source: ICAI Statistics data

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

12

PracticeVs Industry
Relativeadvantages

Relativedisadvantages

Leadershipandindependence

Independenceissubjecttoones positionintheindustry

Multifacetedknowledgeofsubjects
Continuousknowledgegain

Departmentalizationlimits onesexposuretovarious
areas

Wider interactionleadstonetworkingand
personalitydevelopment

Knowledgeislimitedtotheareaswhichoneis
responsiblefor

Fl ibilit
Flexibility

Interaction is with the samesetofpeopleintheoffice

Interactioniswiththe
same set of people in the office
Lesser flexibility

Initially industry is better off, but there are possibilities of stagnation. Where as in a well
established
t bli h d practice,
ti the
th rewards
d are long
l
term
t
andd larger
l
comparedd to
t industry.
i d t
Relativedisadvantages

Relativeadvantages

Futuregrowthin practiceisuncertainand
dependentonpotential,opportunityand
knowledge

Futuregrowthisrelativelycertain

Irregularincome ininitialstages
Initial capital outflow
Initialcapital

Regularincome
Nocapitalinvestment
Promotionsarebasedonyearlyreviews

Longgestationandtransitionperiod

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

13

TraditionalAreas
1. Audit

3. Indirect Tax

Compliance
Advisory
Appellate

Company audit
Tax audit
Co-operatives societies
Internal audit
Specialized audit

22. Taxation
T ti
Compliance
Appellate
TDS
International Tax
Transfer pricing
Remittance 15 CB
CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

4 Other
4.
Oth areas
ROC compliance
XBRL
Annual Returns

Risks and Rewards of Practice

14

EmergingAreas
g g

1. Opportunities in Indirect Taxation with the new

negative list in Service Tax and upcoming GST rules
2. Companies
p
Bill,2012
,
3. Direct Tax Code
4 IFRS
4.
5. International Taxation
6
6.

V l ti
Valuation

7. Forensic Accounting and Auditing

8. Systems Consultation
9. Structuring Entry Strategies for Overseas Companies
10. NRI services
CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

15

EmergingAreas
g g

11. Intellectual Property Valuation

12. Risk Assessment and Management

13. Performance Measurement
14. Investment Advisor
15. Planning and Structuring Revenue Models
16. Business Support Services
17. Corporate Governance
18. International Accounting Practices
19. Government Schemes for industry.. Subsidies available to SEZ
g management
g
20. Research and Knowledge
Refer Annexure I :
CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Microsoft Word
7 - 2003 Documen

Risks and Rewards of Practice

16

EmergingAreas Untappedopportunities!
Mi
Micro,
S
Small
ll and
dM
Medium
di
E
Enterprises
i (MSMEs)
(MSME )
No of MSMEs in India - 2009-10

298 Lakhs

Employing over about

600 Lakhs people

Manufacturing about

6000 products

Contribute about/more than

6% to GDP
Source: ICAI Publication of January
2012

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

17

RecentChanges
g
Companies Bill, 2012:
The number of Companies audited by a chartered accountant is now limited to
20 includingg pprivate companies.
p
The bill also restricts auditor from providing certain services specified in it,
directly or indirectly to the Company or its Holding Company or Subsidiary
Company or Associate Company.
This will create opportunities for the SMPs as the big firms will now have to
give up some of their assignments.
The new negative list introduced in Service tax and the upcoming GST is
another opportunity for Chartered accountants
accountants.
Considering the fact that the Ministry has set a target of Rs.1.24 lakh crore
for service tax collection during 2012-13, one can imagine the number of
people requiring the services of a Chartered Accountant.

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

18

MajorChallengesinPractice
Economic Challenges
Regulatory Challenges
Technological Challenges
Human Resource Challenges
Personal Challenges

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

19

EconomicChallenges
Rapidly increasing costs
Inadequate
q
projection
p
j
of services Rendered ((Value of assuring
g no material
misstatement or of no major non-compliance in Taxation is not adequately
projected and made known to clients which results in accepting lower fees)
Competitive environment
Client loyalties are no longer as stable as earlier (more of professional
relationship)
Retaining clients who are growing big is a challenge (if PU does not grow)
Traditional Areas of Practice like Audit, Tax etc appear over-crowded
Increasing cost of executing Assurance Functions (more time taken in compliance
of Auditing
g & Accounting
g Standards, Regulatory
g
y matters, increasing
g costs of
Manpower etc) without corresponding increase in fees
Lack of Billing Skills throws the smaller firms into the Vicious circle of Low
Fees

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

20

Theviciouscirclecanbedepictedasunder
Low Fees

Lower remuneration to Staff

Inadequate Staff and

Infrastructural Facilities in Office

Low Income for Self

Necessity to increase Gross Fees/ Gross Billing

Take on more volume of low paid work to compensate Low Fees

No time for enrichment of knowledge, technological

up gradation, housekeeping, etc.

Inadequate time for family, specially children our

main wealth/ asset hence troubled family life

Low Quality of Services Rendered

Low Fees
CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

21

RegulatoryChallenges
In Income Tax Reduced no. of Deductions / Exemptions, Simplification & lesser no
of scrutiny cases
Professionals are prone to regulatory actions
(Peer reviews / QRB / FRRB / Disciplinary Proceedings & other regulatory issues)
Frequent changes in applicable standards and guidelines
Too many changes at alarmingly rapid speed
Plethora of internal compliances
Cumbersome procedures

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

22

TechnologicalChallenges
Database management for ready availability of information
Understanding complex IT environments in which clients are functioning (SAP,
Oracle etc)
Understanding how the network environment affects the internal control systems
which generate accounting and financial data
Increasing use of technology is making the clients more independent and self reliant
Constant updation on technological front (unlearning a big challenge)

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

23

HumanResourceChallenges
g
Staff Loyalty and High Turnover
Retaining Talent
Inadequate Training and Practical experience
Stressed Relationships
Preference to mechanical work
g
p
y
Higher
expectations
of salary

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

24

PersonalChallenges
g

Inadequate communication skills

q
p p Societys/Users
y
Perception
p
- Necessary
y Evil?
Inadequate/Improper

Lack of good Time Management (Peak or Non-peak periods)

Imbalance between knowledge and execution skills

Docile/Passive Nature/Character of C. A.s (accept lower fees & delays in

pa ment)
payment)

Greed to increase volume of work at any cost

Expectation Gaps

Inadequate funds and improper financial management

Keeping updated on technical aspects

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

25

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

26

StrategiesandThoughtProcessforpractice

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

27

Practice WayForward
y
Self Evaluation
Proper Billing
Requisites for a successful practice

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

28

SelfEvaluation
Am I technically sound and have the requisite practical experience?
What is my nature?
What are my interests?
What is my financial position and my financial objectives?
Do I have a clarity where I want to be ultimately in the profession?
Do I have work-life balance?
Do I have employee comforts?

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

29

SelfEvaluation
How do I get clients?
Getting new clients can be a very difficult job especially in the current
competitive scenario.
ICAI does not allow firms to advertise
However, one can get work through:
1.
2.
3.
4.
5.
6.

Relatives
Empanelment with CAG, RBI, NHAI, etc.
Networks created during Articleship (with Companies, Executives, Fellow
Articles)
Word of mouth (By providing good services to fewer clients)
Study Circles (Network with Professionals)
Business Development Initiatives

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

30

SelfEvaluation
Should I work as an employee in a firm and then set-up my practice after
ggaining
g experience?
p
Should I be a retainer with a CA firm/Industry as well as have my own
small practice? This will ensure regular income, good experience, better
networking opportunities etc
Should I join an existing firm and grow into the partnership role in the
same firm?
fi ?
Do I want to specialize in an area?

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

31

Specialization.Whatyouwanttobe!

Specialized Stores

Retail Stores

Polyclinic

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

32

Specialization.Whatyouwanttobe!
Initially, one may have to provide all services for getting new clients
However specialization is the need of the hour!!!
In the era of super specialization, where everybody wants the best from the
best, there is no scope for providing mediocre services
Therefore it is better to select your area of expertise and provide specialized
services pertaining to that area
There are a number of small firms in the market providing core business
services to a large number a bigger firms
Such firms have gained great respect and recognition from the professional and
the business community

Growth does not necessarily mean expansion in size..It also

means excelling in what you do!!!
CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

33

PositioningWhereyouwanttobe
g
y
In marketing, positioning is the process by which marketers try to create an
image or identity in the minds of their target market for its product, brand or
organization
Similarly, SMPs need to position themselves in the market to ensure that they
get the
h right
i h kind
ki d off workk andd the
h right
i h kind
ki d off clients
li
Since the bigger segment is virtually out of reach of a start-up business, identify
whether you want to be in the small service provider segment or in the middle
service provider segment.
You can gradually and eventually grow from small to medium and then big!!!

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

34

Rightsizing
Rightsizing means ensuring that your firm has the right kind and amount of
resources to deliver the output expected by clients
This growth strategy is a corollary of Specialization and Positioning
Once you have
h
decided
d id d how
h you want to be
b andd where
h you want to be,
b it
i is
i
important to RIGHTSIZE YOURSELF!
Rightsizing involves having enough man-power
man power to deal with all kinds client
aspirations
Rightsizing ensures that resources are not scarce or wasted but are just in the
RIGHT amount to help you achieve your objectives.

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

35

CommentsofManyPracticingCAs
y
g
Clients are threatening to shift work to some other CA since he is charging lower fees
There is a lot of competition amongst us
Clients often pay fees only when I start next years work
Apart from CAs other professionals like STPs and ITPs also add to competitive
pressures
Increase in fees over the years becomes difficult as clients make roving inquiries with
others
Far too many changes at alarmingly rapid speed

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

36

TheProblemofremuneration/fees
Man-Hour Rates
CAs earnings at the minimum is dependent on time
Hence apart
p from generating
g
g ggood fees out of Advisory
y role,
maximize earnings out of time
Time sheets are a must for each assignment / person in the firm
Refer Annexure II :
Microsoft Word
7 - 2003 Documen

Time is the key factor for a CA

T
To arrive
i att the
th man hour
h
rate,
t one should
h ld consider
id factors
f t like:
lik
Normal working days in a year (240 to 260)
Normal working hours devoted to clients (i.e. excluding time spent for Administration,
Continuing
Co
u g Education,
duca o , Research,
esea c , Updating,
Upda g, Reading,
ead g, eetc.)
c.)
Office Overheads
Comparative House hold expenses
Opportunity Cost, etc
CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

37

HowtoOvercometheProblemof
remuneration/fees
/
The man hour rates for each CA would depend on :
Specialized
S i li d Skill
Skills off the
h CA
Nature and Type of Job / Clients
Seniority
S i i in
i the
h Profession
P f i
Overheads of CAs
Expected
E
d Remuneration
R
i
Quality & Service Levels
Peak
P k season / non peakk season

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

38

CalculationofManHourRates
Calculation of No. of Working days in a month
No. of Working days in an Year
Less:

365

i. Holidays for Sundays

52

ii. No. of Days for further continuing

education

16

iii. National Holidays, Bank

Holidays and unscheduled
Holidays on account of social reasons,
Bandh, etc.

15
83
282

L
Less:

A
Annual
l Leave
L
including
i l di Sick
Si k leave,
l

etc.
t

30

No. of Working days in an year

252

Therefore No. of Workingg days

y in a month
CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

21
39

CalculationofHourly/DailyRatesofFees
Minimum Expected Net Monthly
Remuneration for a C.A.

Minimum Expected Net Yearly

Remuneration
Add:

Overhead Expenses
(see next slide)

Rs

50,000

100,000

200,000

500,000

10,00,000

600,000

1,200,000

2,400,000

6,000,000

1,20,00,000

1 000 000
1,000,000

1 000 000
1,000,000

1 000 000
1,000,000

1 000 000
1,000,000

10 00 000
10,00,000

1,600,000

2,200,000

3,400,000

7,000,000

1,30,00,000

6,667

9,167

14,167

29,167

51,587

1,667
,667
1,111

2,292
, 9
1,528

2,542
,5
2,361

7, 9
7,291
4,861

12,897
,897
8,598

Therefore Rate per Day

Therefore hourly rate
(assuming 4 hours chargeable) *
(assuming 6 hours chargeable) *

* Substantial time of a day goes into Administration, training, etc. i.e. non billable time
CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

40

DetailsofOverheadExpenses
p

Salaries & Stipend of Office Staff and for idle time of chargeable staff
Electricity
Printing & Stationery(including Photo Copy & Computer Stationery)
Interest
Motor Car Expenses
Subscriptions, Books & Periodicals
Insurance (including Professional Indemnity Insurance)
Repairs
Seminar Expenses
Computer Expenses
Sundry Expenses
Telephone Expenses
Depreciation
Rent
: Consider current market rates notwithstanding the
nominal rates paid for old tenancies
Interest
: Consider Interest on own capital (opportunity cost)
Depreciation
: Depreciation should be also considered at replacement rates
Minimum Recommended Scale of fees by ICAI:
CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Adobe Acrobat
Document

Risks and Rewards of Practice

41

Identifyyourclients
yy

While initially, a firm would like to grab as many

assignments as possible, as a firm grows it becomes
important to identify those clients which have the
potential to add value to the firm..

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

42

Gradeyourclients
y
Follow the Pareto Principle..
Principle
80% of the events / activities in life contribute to 20% of the
results and 20% of the events/ activities contribute to 80% of
the results. Hence, successful people concentrate on important
few and pay less attention to trivia many
Focus on 20% clients ggivingg 80% revenue

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

43

ClientsRatingg //Profilingg
One can also do an ABC analysis/ rating of clients based on different
parameters like:
i.

Fees per Client- Good / Moderate/ Poor

ii.

Quality of Client- Progressive/ Good Housekeeping

iii Potential of Growth of Client

iii.
iv. Profile Value: Clients adding profile to the firm

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

44

ClientsRatingg //Profilingg
Clients can be further classified under Three Categories:
Quality lover and fair
Moderate and Practical
Miser
(a) Appreciates grudgingly but has inertia to pay (Generally always complaining)
((b)) Considers CAs as gglorified clerks and with no concept
p of value for CA
(even first time offender clients should be eyed with suspicion)
Can recover fees only from the first two type of clients.
We do not have the luxury or resources to chase sticky debts regularly
The third type of clients can described by the definition of Cynic given by Oscar Wilde
What is Cynic? a man who knows the price of everything and the value of nothing
After few years, dispense with third category of clients since they take precious time without
commensurate revenue

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

45

Requisitesforasuccessfulpractice
Put Service - First Attitude

People with a money-first attitude become so money-conscious that they forget

money cannot be harvested unless they plant the seeds that grow the money. And
y is service. That is why
y put-service-first
p
is an attitude which
the seed of money
creates wealth. Put service first and money takes care of itself.

You dont get an increase in fees on the promise of better performance: you get it
only by demonstrating better performance.
performance You cant harvest money unless you
plant the seeds that grow money.

There never is a demand for anything

y
g second-class,, especially
p
y when it is g
given a
first-class price tag.

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

46

Requisitesforasuccessfulpractice
q
p

Networking with like minded professionals for rendering different types of services to prospective clients.

Discuss serious issues with peers and seniors to get different angles of the same problem

Value addition to client even in compliance work.

Remove the perception of being a Necessary evil in audit and taxation in the minds of the client. One needs
to add value to clients on an ongoing
g g basis and document value added to client.

Be patient as there may be a long gestation period of at least 3 years or more

Increase delegation of work as practice starts growing

Plug Revenue Leakages (Certification, Oral advisory on phone / meeting etc.,)

Do Proper Client Appraisal- whether he has the ability & willingness to pay proper/ reasonable fees

Job assignment should be clear to the CA and the client by documenting it in the quotation / engagement letter
to avoid unpleasant expectation gaps

Quote fees for work only after proper analysis of work, time & man power required

In case of new work/ large work, take advance payment/ installment of fees as the work progresses

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

47

Requisitesforasuccessfulpractice
q
p

Improve office area better large area, good furnishing, good work ambience

People Train people including Articles (clients are observant)

Technolog use
Technology
se technology
technolog effectively
effecti el for improving
impro ing quality,
q alit productivity,
prod cti it management,
management knowledge,
kno ledge
research, tracking work,etc

Rendering Personalized Service with a more broader exposure covering Audit, Income Tax , Service Tax ,
VAT etc)

Provide multi Disciplinary services

Need to network / collaborate / merge

Office timing, system of appointment, time at department, time for introspection, time for physical fitness,
time for family.
family

Empanel with various authorities

Regular updation of knowledge through reading various professional publications and keeping in touch with
recent updates.

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

48

Requisitesforasuccessfulpractice
q
p

Requisites of a C.A.
You get what you deserve. We should resolve to raise our standard of knowledge and
competency and give satisfactory service to our clients.

Make Products of Services (Preparation of Manuals, Company Formation, Compliance

audits,
di etc.))

Systemize work procedures in writing

Billing and Receipts of Fees
Charge as soon as the work get over. Strike when the Iron is Hot
y
should be received immediately.
y Inculcate the habit in clients
Payment
Reminders by email should be sent regularly
If fees are delayed for unduly long period, do not do further work of the clients
p
Do not do further work till earlier fees is paid

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

49

Requisitesforasuccessfulpractice
q
p
Acquire new knowledge and skills in a continuously and rapidly
changing environment for e.g. new laws like IFRS, GST, DTC, XBRL,
Revised Schedule VI,
VI Personality Development,
Development Public Speaking etc.
etc and
for improving technical skills for audit, taxation, etc which will help in
upward movement of practice.
Make room for accepting new good clients/ work
Create & Devote time
i
on Challenging Assignments requiring
i i more time.
i
E.g. Business Advisory Services, Investigations, Corporate Restructuring,
FEMA,
Information System audit, Valuation, Business Process
Outsourcing (BPO),
(BPO) etc.
etc

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

50

Requisitesforasuccessfulpractice
q
p
Increase fees every year by minimum 10 to 20%. Increase more when the
clients/ economy is growing / doing well
Do not fall in the Trap of Lump sum fees for various services
Send detailed billing of work done
R
Recover outt off pocket
k t expenses like
lik conveyance, printing
i ti & stationery,
t ti
traveling, etc.
Word
Refer Annexure III:7Microsoft
- 2003 Documen

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

51

Afterfewyearsofpractice
y
p
Consider merging small firms which leads to specialization
Each partner can look after a specific area.
Increasing networks and client base.
It also increases the capacity of the partners to absorb huge costs eg. Personnel, IT
Costs, overheads etc.
Considering competition from the bigger firms with multinational presence,
prospective clients need, demographics and market trends, ICAI has taken initiatives
in the form of capacity
p y building
g measures to develop
p Indian Chartered Accountant
firms.
The concept of capacity building measures basically includes Networking, Merger
& Demerger and Practice in Corporate Form.
CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

52

AsHenryFordsaid
y
Leadership is the thing.
Whatever you do as a leader,
if you can show that you value
eachh andd every person on
your team, you will attract
talent.
Be ready to revise any system,
scrap any method, abandon
anyy theory,
y, iff the success off
the job requires it

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

53

GrowthStrategies
g
I. Networking
II. Merger and Demerger
III Practice in a corporate form
III.

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

54

Networkingg
A network amongst two or more firms registered with ICAI. The object of network is to use
the collective resources of the affiliates for execution of professional services of one or more
types at one and/or at multi-locational points.
The resources would include financial, technical and other logistic support required to
execute the professional assignments.
Stepping stone for the mergers and acquisitions of the firms.
Once one is comfortable with this kind networking one can go for bigger partnership firms
get the advantage of the big work to follow
follow. This will help the firms to build competitive
advantage over others. The firms will also be able to build up their brands.
The survival of small chartered accountants firms depends on their ability to re-engineer
themselves. This type of networking will be one of the ways of re-engineering of the firms.

Let us make the best out of the facility provided by the Institute!!!

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

55

Merger&Demerger
Merger is the fusion of two or more existing firms.
In order to have an orderly and sustainable growth of the CA firms, it is desirable that
the coming together of the firms begins with networking and then matures to mergers.
The
h mergers should
h ld be
b effected
ff
d to ddevelop
l core competencies
i andd to render
d
professional services of a larger range spread over bigger geographical area. A merged
big entity will always be superior to a network arrangement.
The merger has to precede the demerger and demerger can be demanded within a
period of 5 years from the date of merger.
The Demerged Firm is entitled to practice in its old trade name, which existed at the
time of merger.

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

56

Practiceincorporateform
p
To empower the members to face the emerging challenges in the service sector
as well as to equip them for the opportunities in the non-audit service area, the
C
Council
il decided
d id d to allow
ll members
b in
i practice
i to hold
h ld the
h office
ffi off Managing
M
i
Director, Whole-time Director or Manager of a body corporate.
The body corporate should be engaged exclusively in rendering Management
Consultancy and Other Services permitted by the Council

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

57

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

58

Remembertoprotectyourintangibles
p
y
g

Human Capital
Existing Clients
Clients Satisfaction
abilities
Own Investment & Fund Management
g
Knowledge & Skills
Professional Networks
Health and Happiness

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

59

Brandyourservices
y

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Compliance

To

Consulting

Value
Protection

To

Value
Creation

Service
Provider

To

Solution
Provider

Size

To

Positioning

Risks and Rewards of Practice

60

"A wise man

will
ill make
k
more
opportunities
than he finds
finds."
Francois
Bacon
CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

61

I acknowledge Bhavesh Vora, Tushar Doctor & other colleagues

valuable prescriptions
prescriptions which have helped to cure
cure this paper.
paper
Our sentiments can be echoed with a poem written by Shri A R
Kih
Krishnan,
the
th poetic
ti member
b off Chembur
Ch b Study
St d Circle:
Ci l
If Practicing CAs are not adequately paid
Good number of them will fade
The aura of CA profession will jade
And very few Practicing CAs will be made.
made

CA.Nilesh
CA.
Nilesh S.Vikamsey
S.Vikamsey

Risks and Rewards of Practice

62