Evaluate your CA/Accountant

One of the questions that I always get from a lot of entrepreneurs is "How do I know if my CA is doing a good job or not."

Its a really good question and frankly, there is no accurate way of knowing it. They are into your non sales area and help you deal with the toughest stakeholder, i.e. government. You cant measure whether they bring you revenue or help you make money or even help you reduce cost. It's not their job and frankly worrying whether he is efficient or not should nopt eat much of your precious time.

However, there are few parameters to know if you CA/Accountant is efficient or not. They are just opinion and its advisable to discuss with your CA/Accountant before you take this up as a challenge.

Case A: If you have a full time Accountant or Finance Department:

1. ON TIME, EVERYTIME: The first thing to evaluate is the efficiency of the Accountant. Is he/she consistently working to give you the flexibility and reports that help you with your decisions. There is nothing bad with accountants not doing their job on time. But you need to consider the fact that you are doing business and this means he hasto help you with what you need ON TIME, EVERYTIME.
2. MISTAKE, NOT BLUNDER: "To err is human and to forgive is divine". Its okay for your accountant to make MISTAKES, NOT BLUNDERS, and learn from them but if the mistakes are repeatitive, you need to rethink.
3. QUALITY, GET THEM TRAINED: A trained Accountant would give you better QUALITY results than an untrained one. An employee will not be naturally trained to improve his awareness or efficiency unless as an employer, you take efforts to GET THEM TRAINED. We have a solution for such requirements for our clients.
4. EXTERNAL EVALUATIONS: Be it a single Accountant or an entire department of finance, unless there is a culture of EXTERNAL EVALUATIONS, you will never know if they are being efficient. Get external consultants, like us, to get involved to know whether process set are good, whether the work delivered are proper & accurate and whether all checklists are met or not.
5. NON-COMPLIANCE COST: This by far is the easiest to calculate whether your Accountant or finance department is incurring heavy compliances or not. Usually, non compliance discovery take time, if overlooked, and it becomes a really big pain point or entrepreneurs to pay those hefty penalties, fines, interests and not to miss the harassment, confusion and uncertainty involved until the it's streamlined. This becomes a big NON-COMPLIANCE COST.

Case B: If you have outsourced the Accounting & Compliance work:

1. FRESH EYES: Usually, we all love to have a one CA to deal with all Compliances, Accounting, Finance and Audit requirements. Legally, if a CA is involved in Accounting or Book Keeping, they can't do Audit. It's specifically prohibited under Companies Act' 2013! A FRESH PAIR OF EYES will ensure during Audit that all work will be taken care off.
2. MINDSET: A very important parameter to check is to ensure you and your CA have the same MINDSET when it comes to working style. For example, if you are meticulous, organised and want to scrutinise everything your CA does, make sure your CA is comfortable with it first as he doesn't have to be that meticulous or organised. If you just want to delegate and forget about it, please ensure your CA is meticulous and organised.
3. CLOSE RELATIVE: A lot of entrepreneurs go to their CLOSE RELATIVE or CAs preferred by their CLOSE RELATIVE to ensure trust factor and low cost. It may sound really good but this option comes with its own set of problems. Usually, a relative can spare to not be professional with you and terms of separation can be really bitter for your relatives. It's often advised to work with CAs having Membership Number as they are legit people to work with and you can professionally hold them accountable.
4. CLEAR DUES: A lot of CAs often prefer style of advise to ensure your dependability on them doesn't die. This is nothing but a collateral to ensure their dues are always cleared. Always CLEAR THEIR DUES on time so that they act more professional when they advise you. Service and Service Delivery are two very different things. It becomes easier to take control of your login credential, documents, sensitive information, etc. in case of separation & control.
5. SECOND OPINION: Sometimes, its better to get SECOND OPINION from other CAs, just to ensure that advise by CA is the best way to go ahead. A CA would never advise you wrong unless he is inexperienced or doesn't know some things or especially with online service providers providing accounting, compliance & book keeping services. A SECOND OPINION always help when you are getting into intricate decision making.

This by no means sums up that these parameters are exhaiustive. There may be more, case to case specific. Being a practicing CA myself and having served to variety of entrepreneurs in last 4+ years, I have had opportunity to face lot of such failures and learn from them and that is exactly what experience of CA counts for an entrepreneur.

If I have missed anything or if you disagree with something above, feel free to revert back with questions, queries and comments.