I started out my practice as Chartered Accountant with a very idealistic view of the profession. I did my article ship from a small firm in a small town wherein the major experience was reconciling trial balances in the audit. My income tax experience was limited to preparation of expenditure details, tagging of the balance sheet, copies of receipts of exemption claims and manual filing of forms standing in long queues. For the cause of filing a return, it was a job to write “enclosures attached throughout the pages of return. After I qualified, I realized that starting my own practice would be a challenge which I would love to face even though this did not give me the exposure for tax practice, more of that later. Though, my father was an Income Tax Officer so my expertise in tax exposure could yield the early results of my career. However, the desire to be self-determining and the ability to think on one’s feet is a per-requisite for setting up a successful practice which I honestly followed.
If you’re thinking about starting a practice, identify your strengths and your weaknesses first. This is an exercise to make you feel good (or bad) about yourself. It’s a process that will allow you to understand how you can be most effective at what you do, and where you’ll need to improve if you want to be successful. It is very important at the outset to assess your strengths and weaknesses before embarking on an independent practice. Make a list of your weaknesses, and work on them to increase your own confidence and ability to interact with both your clients and the various statutory authorities. Make another list with all your strengths – it is very important, over a period of time, to convert your weaknesses into strengths. After you’ve spent some time honestly assessing your strengths and weaknesses, it’s time to get input from those closest to you: a significant other, seniors of the profession, your mentor, close friends, or family members. You need to decide the focus area of your practice and work on the same. Fresh CA’s, in reality, do not have much of a choice, as they have to project/have an overall competency in the various fields of practice. Clients come to you with the expectation that you will handle their entire financial affairs –income tax, accounts, audit and now GST . You cannot afford to say I do not do GST or income tax as you run the risk of losing a client.
RAISE YOURSELF TO BECOME CLIENT- CENTRIC
You have to learn the technique to think like your clients. One must bear in mind that the raw material for any professional practice is one’s time and intelligence and the end product is money in one form or another. More importantly, the practicing chartered accountant thinking originates with clients and ends with clients. Both the ends are not far from each other. Also, bear in mind that any mistake or error you make affects your clients’ pocket. This is because your decisions and advice have a direct bearing on your clients’ finances. Any mistake could lead to the client paying either additional taxes or penalties, which could lead to further litigation and costs. Thus you should ensure that the advice you give is after due deliberation and study of the various provisions of law. This will ensure that you enter into minimum litigation, and gain the confidence of your client. The spin-off benefits could be more clients through referrals from satisfied customers. There’s always a silver lining to be found in even the most challenging situations.
Satisfied clients are loyal clients. The continuity of clients year after year clearly shows that you have prioritized their needs and ultimately it results in your increased revenue. Continuing with the same clients is more profitable and a hundred times better than seeking out new ones. The fact is that client retention is directly related to increasing your receipts. Happy and satisfied clients are likely to recommend you to the others. It is like the modern day blockchain concept as such clients and their referrals increase your visibility and draws new clients to you. Ethically, we can’t approach anyone to seek the professional job; Referral is the best and only way to increase your client base. In the early years, yes it’s difficult to get the clients but patience certainly gives good results. Client relationships, their satisfaction and referral, all at the end of the day, you’re in an H2H world…. human to human and that’s why the importance of client satisfaction comes at the top.
Honesty and integrity are very important for staying in the profession. This may sound like a paradox – but it is true. This approach pays in the long run. In the early years of practice, one will come across situations exposing both the client and yourself to situations of vulnerability. This is especially true at the time of Income Tax / GST or appellate hearings. One should rise above temptations to take shortcuts demeaning the profession as well as the efforts you have taken to pass a rigorous professional course. It is always difficult to take the road less traveled because it is fraught with difficulty, but believe me, the fruits of success and the feeling of satisfaction it gives are worth the effort. After all, a good night’s sleep at the end of an exhausting day is always worth it.
If you rationalize your decisions by saying, “Everyone does it,” you should reconsider. Unethical behavior is not only what you believe to be right and fair, it is a reflection of your personal brand and what people can expect from you personally and professionally. The answer to the question “How does one do ethical tax practice?” lies in your approach to the profession. At the outset, when negotiating with a new client you should clearly lay down the guidelines for a working relationship. Get an engagement letter from the client wherein your services are clearly described and fees specified. Explain to your clients the benefits of declaring the correct income, paying honest taxes and sleeping peacefully at night! Explain the various deductions which can legitimately be claimed by proper tax planning and have the client pay the advance tax in time – these two simple steps will lessen your burden considerably. I have found a simple solution for dealing with tax officers and clients. I attend the scrutiny proceedings and present whatever records are called for professionally, agreeing to reasonable dis-allowances if warranted and after that bringing the client into the picture. After explaining to the client the salient parts of the expected assessment order and getting his concurrence to the same, the client and the officer, after discussions agree on the final assessment order. I do not mean to sound self-righteous – but that is the manner in which I have been able to live with my integrity intact. I am not saying this is the correct way or the only way – but each person will need to find his own feet and his own methodology in fighting this cancer of corruption pervading our society. The enduring thing to remember is that every drawback one faces can be treated as a fresh challenge to be converted into an opportunity. This was my formula to my career – not a monetary success initially but enduring, professionally satisfying success – that’s what’s important.
It is of paramount importance to chalk out your key practice areas, adopt a practical and realistic – though honest approach, and be true to your principles and follow the Code of Conduct laid down by the Institute in letter and spirit. Your strong sense of personal ethics can help guide you in your decisions. You might be surprised to find yourself with an ethical dilemma about something that is second nature to you. This will, with the passage of time, prove to be your recipe for success and will also contribute to cleansing the system of wrong practices over a period of time. But compromising your ethics even just once is a slippery slope. The idea is that one thing leads naturally to allowing another until you find yourself sliding rapidly downhill. Ethics is all about the art of navigating the slippery slope: you have to draw a line for yourself, decide what you will and won’t do—and then stick to it. If you don’t have a strong set of ethics, you have nothing to use as a guidepost when you are in a situation that challenges you morally. A highly developed set of personal ethics should guide your actions. The only way to develop a strong sense of ethics is to do what you believe in, to take actions consistent with your principles time and time again.
(About the Author– Author was Member of ICAI- Capacity Building Committee 2010-11 and ICAI- Committee For Direct Taxes 2011-12 and can be reached at email [email protected] or on phone Phone: 0121-2661946. Cell: 9837515432 having office at 115, Chappel Street, Meerut Cantt, UP, INDIA)