To run a successful business in India, there is more to a good idea and a team with the needed motivation. Financial planning, compliance and reporting are one concept of business management that is critical. It is here that the chartered accountant (CA) comes in. The question that runs in the mind of many entrepreneurs is whether to get a Chartered Accountant on a regular basis or take a Chartered Accountant full-time. This choice can significantly affect cost-effectivity, compliance, and future development.
In this blog, we shall discuss whether you need or should consult a Chartered Accountant and the roles they play as far as taxation, audit, GST, and compliance are concerned and other factors that may help you decide what to do.
Who is a Chartered Accountant and Why Do Businesses Need Them?
A Chartered Accountant (CA) in India is a certified finance professional qualified by the Institute of Chartered Accountants of India (ICAI). CAs are experts in the fields of taxation, auditing, GST registration, compliance, financial planning and advisory services. In India, businesses frequently receive complicated financial policies like the income tax law, the GST law, the law of companies and MCA compliance.
Role of a Chartered Accountant in Business
Engaging or hiring a CA is beneficial in many ways.:
- Tax Planning and Filing: Ensuring the timely submission of GST returns and income tax returns.
- Audit and Assurance: Performing statutory, tax and internal audits.
- Company Registration and MCA Filings: Sampling of incorporation, annual returns and compliance help.
- Financial Advisory: Provide information on cost-cutting, profitability and business expansion.
- Risk Management: Finding some financial loopholes and fraud prevention.
Should You Hire a Chartered Accountant?
Advantages of Hiring a CA Full-Time
- Dedicated Support: A full-time CA puts all his attention on the finances of your business.
- Quick Decision-Making: Immediate access to financial decisions/compliance.
- Comprehensive Management: Whether it is payroll or tax audit, everything is done under one roof.
- Useful for Large Enterprises: Firms with many outlets, high movements of staff and a history of frequent audits are the ones that like to have in-house CAs.
Disadvantages of Hiring a Full-Time CA
- Increased wages and the cost of operations.
- Not very economical for new businesses / small business entities having lower compliance requirements.
Should You Consult a Chartered Accountant?
Advantages of Consulting a CA
- Cost-Effective: You only pay towards the services on demand.
- Flexibility: Select definite services such as filing tax or GST registration, or MCA compliance.
- Expertise Access: Appoint expert CAs to your needs.
- Perfect for Startups and SMEs: Firms with few transactions save a lot of expenses through the consultation of a CA.
Disadvantages of Consulting a CA
- Lack of ongoing support in times of crisis.
- It may involve frequent coordination and document transfer.
When to Hire and When to Consult a Chartered Accountant?
- Hire a CA: When there is a big business, it needs to constantly monitor the financial aspect, or there are frequent audits.
- Turn to CA in case you are a small, medium-sized enterprise or a startup that requires some occasional assistance.
For example:
- A small tech startup with inadequate transactions can only hire the services of a CA to file taxes and ensure compliance.
- A manufacturing company with more than one branch might require a full-time CA who would be on hand to undertake continuous financial management.
Cost of Hiring vs. Consulting a Chartered Accountant
- It may cost between 6 and 12 lakhs per annum to ensure that a CA is employed on a full-time basis.
- Glassdoor suggests consulting a CA on services like GST registration, income tax filing, or an audit may cost anywhere from ₹5,000–₹50,000 or around ₹5,000–₹50,000 depending on the service’s complexity.
Therefore, consulting is cheaper in the short term, while employment can be beneficial in terms of long-term growth and complex business setups.
Why Chartered Accountants are Essential for Business Growth?
Whether you employ or employ a consultant, as a business, it is important to have a Chartered Accountant:
- They ensure your business is in line with tax and corporate laws.
- They prevent stiff penalties as a result of a lack of compliance.
- They help in the making of strategic financial choices.
- They pre-qualify businesses in preparation for fundraising and investor presentations.
Conclusion
The question of whether your business should hire or consult a Chartered Accountant depends on whether your business is small, medium-sized, or large in terms of size, turnover and other compliance requirements. In the case of small to medium-sized businesses, consulting a Chartered Accountant should suffice and is low-cost. Mid-sized and large corporations that have complicated financial processes to undertake need a full-time CA to provide stability, compliance, and oversight of the financial processes of the corporation.
In the prevailing modern business environment, the availability of the appropriate Chartered Accountant can be the distinction between an enterprise that struggles and an enterprise that prospers.
FAQs
1. Why does a business need a Chartered Accountant?
A Chartered Accountant assists in filing of tax, GST compliance, audit, financial planning and risk management. They help to keep the business within the law and aboveboard financially.
2. Is it better to hire or consult a Chartered Accountant?
Periodical GST registration or tax filing needs of small firms and startups can be consulted by a CA. Businesses that are large, audited, and compliant regularly would hire a full-time CA.
3. How much does it cost to hire a Chartered Accountant in India?
The CA fee is between 6-12 lakhs per annum on a full-time basis, whereas between 5000-50000 each on a consulting basis, depending on the complexity.
4. Can a Chartered Accountant help with MCA compliance?
Yes, CAs can be relied on to help with company incorporation, annual compliance, etc.
5. Is consulting a CA online possible?
Many Chartered Accountants provide online consultations to businesses, hence compliance is quick and convenient.
