Challenges faced by professional CAs, CSs

Dear Connections,

Are you a practicing professional, such as a chartered accountant, company secretary, or similar!

Do you find yourself grappling with various challenges in your practice-

• Clients providing data late;
• Delayed professional fee payments;
• Fear of losing clients?

If you answered yes, then please take a moment to read this post as I share my thoughts.

Section 1: The Challenge in our field

The primary issue in our field often boils down to one question:

Do business owners truly care about their balance sheets, profit and loss statements, or audits?

• In most cases, the answer is no. Many businesses only engage in these processes to meet legal compliance requirements imposed by Indian laws.
• Furthermore, business owners often feels that do not personally benefit from our services.
• They go through the motions for compliance purposes, not to assess their profits and losses or understand their business's true financial standing.

How many business owners genuinely study their balance sheets and profit and loss statements, and how many base their decisions on the financials prepared by professionals like us or the insights we provide?

• In many cases, business owners conduct their affairs as they see fit, irrespective of financial statements, remarks, or suggestions. There's often no personal interest or benefit driving their actions.

Now, let's draw a comparison with a practicing doctor:

• Do patients request treatment from doctors?
• Do doctors work tirelessly day and night for their patients?

The answer is often NO.

Why?

• Because patients have a need, and they will research to find the best doctor regardless of the fee charged.
• Patients do not wait until the last minute or seek medical care at odd hours. They book appointments in advance to receive prompt attention.
• Doctors maintain fixed hours of availability, and if a patient requires emergency care, they may need to pay extra. This contrasts with the flexibility in our profession.
• Patients have a personal interest and benefit in maintaining good health and a strong body, which is why they value doctors.

In contrast, many business owners fail to understand the importance of a good balance sheet or profit and loss statement. They often don't take our roles as seriously because they already know how they want to run their businesses, regardless of financial statements, ratios, and other financial metrics.

Consider this: How many financial statements genuinely provide a true and fair view? How accurate are they? For many businesses, these are mere formalities, and this lack of attention often leads to business failures.

Doctors receive their fees in advance, while professionals like us often have to wait for payment, sometimes after numerous reminders. Negotiations over fees are commonplace in our field, whereas patients rarely haggle with doctors. Moreover, patients refer other patients to doctors, but in our profession, clients often compare fees and seek discounts.

So, what's the solution?

Setting Fees Wisely:

• Let's delve into an example for setting your fees. Suppose you need ?1 lakh per month to cover your basic expenses, including rent, utilities, and personal livelihood. You decide to work 8 hours a day, 25 days a month, which amounts to 200 hours in a month. To meet your financial needs, you must earn ?1 lakh in those 200 hours.
• Now, if you charge less than ?500 per hour for any assignment, you may not be able to cover your basic expenses. This means you won't have the remaining 16 hours in a day for your personal tasks, be it pursuing personal goals, hobbies, or research work that could generate additional income.
• If you make a habit of working 15-16 hours just to meet your basic monthly expenses, growth becomes elusive, and you may find yourself trapped in this cycle.

Limit your availability:

Remind clients to provide necessary information and emphasize the importance of timely responses.

Set specific working hours:

Set specific professional working hours (e.g., 10-7, Monday to Friday) and avoid odd hours and holidays. Use your personal time wisely.

Price your services appropriately:

Don't undercut your rates to compete; calculate fees based on your expenses and needs. Remember, your time is valuable.

Develop your unique approach and principles. Stand out from the crowd by following your path.

Think about these ideas and put them into action. Your feedback and comments are welcome. Remember, this post is a reflection of the majority, and exceptions always exist.