Chartered accountancy is one of the most lucrative and vital practices in any country. Chartered accountants (CAs) are professionals with robust knowledge of accounting, law, taxation, audit and other financial subjects.
However, a successful CA firm requires more than exemplary accounting skills. Apart from hiring efficient employees and training them, a CA firm needs funding for infrastructure, events, equipment, office rent, subscriptions etc.
Here are the stipulations to establish a successful CA firm:
1. Salary and stipend of the office staff
Skilled and motivated employees are important for the success of any organisation. The main problem that many CA firms face today is employee retention. The attrition rate of articles, trainees and junior accountants is extremely high, leaving the firms to look out for recruits repeatedly. Recruiting a chartered accountant can cost you around Rs. 7 lakh to 8 lakh a year, while it can go up to Rs. 25 lakh based on experience and proficiency. Add employee insurance and other stipends to it, and it becomes a huge wage bill.
2. Trade license and government approval
As per the state government's fundamentals, a CA firm must register and take a professional tax registration approval from the municipal corporation and a trade license. You can set up a CA firm anywhere in India.
Additional read: Apply easily for Bajaj Finserv CA loan
3. Office expenses and infrastructure
Ensuring a high-end location for your CA firm becomes important in the competitive world. An equipped office is completed with technical proficiency and befitting infrastructure.
However, leasing or hiring a property at prime locations may burn a hole in your pocket. Acquiring an office at Bandra Kurla Complex in Mumbai can cost you around Rs. 8 lakh to Rs. 10 lakh a month. Add electricity and computer expenses, and you have a huge expense.
4. Upgrading of technology
Your CA firm should adopt the latest tech trends, in addition to basic infrastructure and good talent, to offer employees the best facilities. Technological advancements like cloud computing, blockchain technology, and automation revolutionise accounting techniques.
The National Management of an Accounting Practice Survey, 2016, found that 56% of the accounting firms are using advanced techniques to enhance productivity. Installation, infrastructure maintenance and labour charges for these technical elevations may cost you around Rs. 10 lakh, along with monthly maintenance charges.
These expenses could add up and disrupt your dream of running a successful CA firm. High costs of training and installing the latest technology for your firm may affect your business. Still, with loans for chartered accountants from banks or non-banking financial corporations, you can turn your venture into a highly successful unit.
Additional read: Top tips every practising CA must keep in mind
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