Story of due dates and their extension – Solving “y (why)” in “due date” equation
Just like any other year, yet again, the due dates are requested to be extended by tax practitioners and Chartered Accountants. This is not an isolated incident, but request for extension of due dates has been consistent for years, whether it be tax audit, VAT audit or even a return filing dates.
The reasons that are often given for this request are also more or less similar – late release of modified forms by government, technical glitches on website, other compliance responsibilities (especially in new laws like GST and RERA). The alleged issues are of such a significance that the Institute of Chartered Accountant’s of India has itself stated in its representation that to the CBDT that the “CA office are working overtime” and that they are “unable to cope up”.
While the reasons may be genuine, it is not the first time that these issues are faced by Chartered Accountants. The Government can be blamed for much of the problem; however, it is also the time when practitioners introspect. The reasons cited this time might be temporary, but the inherent issues persist. It is high time that the practitioners identify and address these inherent issues – ineffective outsourcing strategies, shortage of trained manpower resources, outdated technology, and so on.
Sustainable solutions
– Outsourcing
When the senior practitioners are working seven days a week in peak seasons, it is often observed that young practitioners have the bandwidth to accommodate more work. Therefore, it is important to develop the mutually acceptable outsourcing strategies, to overcome market inefficiencies. One of the important points to consider in outsourcing strategies is giving a sense of client ownership to outsourced young practitioners i.e. delegating a client rather than delegating the work. Off-late more and more Chartered Accountants are entering into the practice area leaving a corporate job waiting for them and one of the very significant reasons for this is the willingness to have control over their work and clients. Therefore, the sustainable way of outsourcing strategy for senior practitioner seems to be giving the sense of control to them over the client rather than hiring them for an assignment.
– Capacity building
Moreover, despite of the increase in workload and consequent inability to cope up with due date pressure almost all the time, practitioners are reluctant to enhance their resources by scaling up, as it entails increase in fixed cost. Hiring new people, renting more space, investing in technology are few measures to enhance capacity which should be considered to deliver timely and quality service. Also, the training of personnel is of paramount importance in this dynamic environment of ever changing laws. Indian practitioners need to learn this fact from the Big4 firms who invest heavily in different training programs. These measures will have a cumulative effect of practitioners being able to manage their work effectively and meet due dates.
Way forward
It is pertinent to note that when the businesses worldwide (especially Scandinavian countries) are yielding positive results for 32 hours (4 days * 8 hrs) a week plan for their employees, the Indian CA firms are acting regressively by increasing the number of working hours per week. Interestingly though, this is not due to shortage of CAs but due to uneven distribution of work, inefficient allocation and lack of flexibility in the practice area. Therefore, it is important to proactively take steps to adopt Scandinavian work culture instead of Japanese work culture of 12 hours a day which is unsustainable. This will ensure better work-life balance of practitioners & their staff.
Author Bio
Not agree with you sir. In case of medium and small business, they are not serious about due date etc. every thing is thrown up on CA. If the Books of Accounts is given to CA to Audit at eleventh hour, how one can Audit and issue report ? There should be awareness in small business relating to this. Uneven distribution of work is because of Clients behaviour . It is not problem of CA office.
Comments as already given are valid generally. Further, it is important to note that every compliance including tax audit, income tax return, company balance sheet, gst etc. etc. require multiple generation of information in different ways and we as a practitioner have to see that these are correctly place before certifying. Though big business houses have all infrastructure to provide the information in required form, however a medium and small business leave it to CA to do it which consume a lot of time and energy. It is therefore important that efforts shall be made by the regulators to harmonise the legal requirements. I wonder why KYC of director need so many documents and certification clauses when information are already linked with AAdhaar. Why there are two versions of emsigner for GST and MCA. There are so many other instances.
There are now different agencies, looking at the same data in different ways. The reporting requirement for each agency is different, be it income tax return, GST, XBRL, RBI etc etc. Why not make a standard data reporting format for assessee’s. All data will be periodically reported in the format. Various government agencies can do data-mining and pull the necessary reports. Incentivise such assessee’s by limited scrutiny since all data is already submitted
This may not necessarily be so. IF forms are modified in the middle of the period, the softwares are to be updated which requires time. Further when reports are finalised before the amendments, they have top be redone which also involves time. Even when you hire more people and invest in technology , this time lag is inevitable. What is the heavenly achievement in reducing the time limit for filing reports and returns. In turn is there any time limit adhered to the rectifications and refunds?. Even if work is outsourced to juniors also they also will have to undergo this process.
Sir,
1. Technical glitch:-
is it also happens in Scandinavian country ?
Is there so incompetent government ? Even one year after of GST, their website is worse.
2. Outsourcing….Is your fees increased after GST ? We are considering hard cash in flow of our clients….Large numbers of client are paying monthly GST, which were in bracket of quarterly…. Earlier…..
Sir, we are contributing to nation by hard work along with back pain, blood pressure and diabetes…….And total lack of time to family
Dear Rushbh Memani,
u speak from Mumbai. Have you ever considered the cases of practitioners in the mufassal area?
The network will be poor; They have todepend on BSNL only, with its uncertain services.
You would not get qualified CAs to work with. If you attach the clent with the CA, the client will go to that CA from the next year. There will not be much corporate clients in the mufassal areas, to protect our own practice. The software and technical assistance walso will not be easily available.
The city CA firms having too uh work can give out open offer for subcontracting to upcountry CAs in the Institute journal. Will they do it? AT least they can be safe from losing the audit work.
These comments are highly arrogant. without knowing the practical difficulties faced by us making this type of advice is deplorable.
One more reason is that CAs feel that they can everything under the sky and grab it to earn more.High time CAs restrict their practice to their domain area- attestation, audit, IT and financing,etc instead of grabbing Indirect Taxes,Company Law, Registration under labour laws which take more time and end up in shortage of time for core areas.
Should we say Greed?
The delays and extension arises out of change in reporting systems at a short notices. This makes the reporting complicated. Our tax changes are so frequent that it makes work of CA difficult. The staff of CA are so embroiled with these changes that they have to work up to 10 pm. It has made their life miserable. My own CA reported that a young CA of 37 years passed away due to intense workload concerning compliance. Let there be fix rules for at least 12 months and any changes should be made effective from 1st April. This will ease the work of professionals, CAs and make compliance better.
It is not only the factors mentioned by the author, the tax audit and other audits have to be done within a short time as the assessees/clients also do not furnish the accounts / details in time. The work is seasonal and hence even if additional personnel is emplyed now, later they have to be provided continuos work throughout the year. In this professional work a lay graduate / apprentice / semi qualified cannot be engaged suddenly. They have to be trained. Time and financial constraints are big factors.
Sir, Easier said than done. The problems arise primarily due to the reasons stated by you viz;
website glitches, changes made in forms/ reports mid season etc..where the CAs or their clients have a limited role. Your are also overlooking the fact that most of the legal offices world wide work long hours each day including weekends to meet their committed deadlines. We in India are no different.
Capacity building can be of limited assistance unless the statutory directives are made known in the beginning of the financial year.
Dear Rushabh Mamania,
Resources will be increased based on assignments, but work pressure will not be the same all through the year. Any CA will understand that. Due date extensions are required for additional assignments to be completed in fixed time frame. DIR-3 KYC was notified in August and due date is 15/09/2018. Govt is fully aware of timelines for any consultant. Since its a yearly process why was not that process postponed till January 2019? GST was implemented last year, and reconciliation should be done. How many times you will be getting logged out automatically while accessing GST website? Please look into that issue too. There are other challenges too which being CA you must be aware of.