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Evolution and Future Scope of Accounting & Tax consulting in the Indian market

By Deepak Narayanan, Co-founder & Director, MyCFO

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Deepak Narayanan, Co-founder & Director, MyCFO

“Every accountant would emphasize the importance of good accounting principles,” Doesn’t this sound like a no-brainer to most of us? Looks commonsensical but common sense is rare among humans. We tend to adopt best practices because someone else is doing it or this is ‘forced’ by regulation and not because we believe we should be doing this. Am I guilty of generalization? Think about it, introspect and see what’s happening around you. Do not give examples of what the best companies are doing, they are in minority and some of them are doing this for a long time. The majority is where the problem lies. We believe that we are better off than what we were, that’s precisely where the issue is. If our standards were pretty low in the past and that is the benchmark that we are looking at, we may always end up looking better. Consulting is playing a big part in bridging this gap. This article is not about raving about consulting, it is about how high quality consultants and consulting firms can help companies adopt the best.

Have we given a thought about why some companies are looked up with ‘admiration’, how they end up being so ‘lucky’ in terms of being able to attract the best talent, end up forging partnerships with good companies and end up consistently growing their business? This is irrespective of the size, the industry and who they know. The answer is simple. They get their basics right every time. Growth is sustainable only when companies believe there is a need to bring transparency, hire and retain great talent, improve governance standards and ensure that their back end whether this is in the form of accounting and IT keeps up pace with the pace of growth in business. The companies that are admired, the ones that are perceived as ‘lucky’ simply do this most of the time. This can be fixed either through an in-house solution or by hiring a consultant/ firm who can do this for them. A word of caution: whether it is you or the consultant, the company needs to communicate its intent to its team about the change that it is about to embark. The seriousness of the intent needs to come through clearly. Else, this will be perceived as ‘one of those initiatives’ by the company where people need to go through the motions. The collateral benefits of getting this right is that the ‘perception’ of the company improves, its ability to attract and retain people goes up significantly and it puts itself in a better chance to attract investments particularly FDI since emphasis on transparency and governance is higher, which is sad but true.

Is it fair to state that accounting and tax consulting has evolved over the years in India? The answer is ‘Yes’ overwhelmingly. However, what has also changed is the complexity of the world in which we all live. Businesses are getting global or being impacted by global trends, there is more volatility and uncertainty than there was ever before and new business models are disrupting the way business is being done. The role of consultants therefore also needs to undergo a massive shift. Being able to adapt to these changes, being nimble and flexible together with the ability to provide ‘high quality’ solutions is the need of the hour. A consultant is no longer valued based on his relationship with the top boss; his ability to add value is being questioned possibly every day and this is the new reality. Is this unsettling? Yes it is, but then consultants as a breed came into existence to be able to provide ideas, advice and even implement (consultants especially in India need to focus on implementation) them under ambiguous situations or under circumstances that the company may not have seen or thought this through. The consulting industry in today’s day and age needs to be a lot more agile and lot more well-informed given the business needs. A 21st century consultant not just needs to tell ‘what’ is to be done’, he also needs to ‘get it done’. Access to high quality information, platforms, mentors (very successful entrepreneurs and professionals today are lending time) has made access to advice infinitely easier as compared to the past and which is why I believe that ‘execution’ or being a ‘part of the solution’ will make consultants more successful. This needs a massive change in thinking.

The impact that a consultant can bring in is to be able to cross-pollinate best practices, bring in a sense of urgency on ‘delivering results’ and to be able to channelize/ free up the management’s time in focusing on building the organization while accounting and tax is being handled by him. This brings disproportionate value to the organization as more time spent on building and growing an organization will only benefit all the stakeholders associated to the organization. Consultants need to move from being a ‘vendor’ to being a ‘partner’. Tough? Think about it.

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