Friday, May 25, 2012

Value of CA Services

Earlier, I have written various articles relating to students. This is my first article keeping in mind Chartered Accountants in Practice. This article also applies to any professional providing services in the form of practice. However, I am writing this article for Chartered Accountants only. This article is regarding the value of services given by CA’s in Practice.

Ours is not a business industry whereby we can estimate the cost of goods manufactured or cost of goods traded. If we consider the expenditure we incur on providing our services, it is very negligible. Being a professional we spend our time or rather we invest our time. So the value of services cannot be measured as easily as compared to products. So how should the services be valued?

There may be different perceptions about how to value the services and charge accordingly. But by any means or methods, the crucial factor on which the calculation should be done is time. We provide our time to clients. Time is the most important factor of our services. Here the question arises is how should we charge on timely basis. Calculating the value of time is not so easy task. There are certain criteria on which it is based. Two of these are estimated time of work expressed in terms of hours and remuneration expected from practice expressed in terms of money.

First we need to calculate how much time we are going to work effectively during a given period of time, say one year. This time should be expressed in terms of hours. Second, we need to calculate what our expected remuneration from practice is. This should also include the overheads we incur for maintaining our professional office. On the basis of these two criteria, we can estimate the expected earnings per hour. Here I am not giving any demonstrations for this. This thing is simple to understand. My purpose is to make the readers understand the need of calculating the expected remuneration per hour and charge accordingly.

However, in practical, this thing does not happen. Especially in non-metro cities, the members don’t charge or at least don’t calculate their expected remuneration per hour. This leads to under valuation of their services. In most of the cases, fees are not charged in proportion of the time devoted for the respective work. Our prime investment in services is time. So while charging the fees, due respect should be given to time also.

Apart from calculating the hour rates of partners / proprietor in the firm, similar calculations should also be made for the qualified and semi-qualified staff members, audit and articled assistants, support staff, etc. This calculation not only makes us realize the value of time, but also results in improved efficiency of partners and staff in the office.

There are certain tasks for which the time involved and fees charged cannot be exactly correlated, because of which such assignments cannot be charged on hour-rate basis. Examples are audits of small traders, tax advisory services, etc. However, in such cases we should estimate time involved for each of such service and derive the fees to be charged.

I would like to make it clear that time is not the only factor on which the fees should be decided. There are various other factors on which the charging of fees can depend. Some of them are the nature and volume of work, scope of work, the needs of the client, priority of the work, etc. These factors affect on the charging of fees from time to time and case to case.

This was regarding how to value our service. But now the prime reason why there should not be undervaluation of our services. I repeat again, we are not selling any product in the market, but we are providing services. But as like product, clients expect quality services from professionals. If we compare among products in the market, the better the quality the higher is the price and vice-versa. Similar is the case for services. But here fees are not based on quality, but quality is based on fees.

If we try to charge less to clients, initially we may attract some clients but we cannot assure quality services to them, because if the remuneration is less, the dedication is also less. On the contrary, if the remuneration is more, the dedication is also more. This results in providing of qualitative services which in turn results building the goodwill of the professional as well as the profession. If a person is charging less just to sustain in competition, he will sustain the price competition but he won’t sustain the competition of quality and enrichment of services.

The race of service industry cannot be won on the basis on reduced prices but on the basis of improved quality. And for providing improved quality services, the right price is also to be charged. So, all the members of the fraternity, please value you services properly, and the services will value you in return.

CA. Amol Gopal Kabra

Tuesday, May 22, 2012

Failure is not Falling Down

In this age of cut-throat competition, everybody is racing towards success. However, it is not possible for everyone to succeed at once. There is competition almost everywhere. In every phase of life, in every sector of life, there is competition. Everybody wants to succeed. Nobody wants to fail. Still it is not possible that everyone will succeed. But in this race, people fail to understand the real meaning of success and failure.

Those who succeed don’t think need to understand what the real meaning of success is. They are too much satisfied to care about. On the contrary those who don’t succeed are also not aware what the exact meaning of failure is. They are too much depressed to care about. In this article, I’ll just write about the latter part and not the former. I’ll write another article for it.

In common parlance, failure means not achieving something that is desired. Examples of failure are, failing in exams, making losses in business, failing in job interviews, failing in scientific inventions, failing in love, failing to win sports tournaments, etc. These are the ‘so called’ examples of failure.

However this is not the real meaning of failure. According to a popular maxim, “Failure is not falling down, but refusing to get up.” This maxim looks easy to read but again people fail to understand it properly. They don’t apply this in their own life when they fail to achieve something they desire. The point of failure is not that when you didn’t get success, i.e. you fell down. The point of failure is when you don’t get up again to achieve what you desire.

There is an example which all of us have experienced in our life. As an infant, nobody can walk. Babies just crawl and make their moves. But after a certain period of time, the same baby can walk fairly well. After some more period of time, the baby can walk perfectly. Does this change take place overnight? The answer is no. There are many instances when the baby in an attempt to stand on his own legs and walk, falls down. But he still manages to stand up again and again and after numerous attempts, he makes himself capable of walking.

This baby is none other than what we ourselves are. If suppose we didn’t get up after falling and didn’t try again and again, then I think, the scenario would have been like this – We all would have crawled instead of walking and running. This seems to be a very simple example, but this is the first success in everybody’s life.

We tend to forget that we didn’t have the attitude of quitting in our childhood. This results in many people quitting their own efforts that lead them towards the success. Failure is final when one decides to quit. In fact if it is your dream to achieve it, then you should not quit till your dream is fulfilled.

Swamy Vivekanand has also given the same message in one of his saying – Arise, Awake and Stop not till the Goal is achieved. This thought also means the same that don’t stop after you fail. Don’t quit till you achieve your goal.

The great scientist Thomas Edison failed for almost 10000 times before inventing the electric bulb. But finally he succeeded after these many attempts. After so many attempts, his attitude was I have found 10000 ways of not inventing an electric bulb. This attitude of not quitting after failed attempts has led him to the success of inventing the electric bulb.

If we look at most successful people in life, everyone had to face to different failures before achieving the successful position in their life. When we look at the successful people, we just say that it their luck. But I would like to tell that luck favours the one who is prepared to achieve in all respects. So don’t just look at the luck of successful people. There are lot of other things that led them to their success.

I’d like to conclude that whenever in file you come across any failure, don’t get disappointed, don’t feel down. Just get up and get going. Success is waiting for you.

CA. Amol Gopal Kabra

Thursday, May 10, 2012

Believe in Yourself...!

There is an old maxim which says, “God helps those who help themselves”. It means that God, the super natural power favors only them who are ready to help themselves. Those who just wait and watch for letting things happen automatically end up achieving nothing. However, working only is not sufficient. Barring a few exceptions, people keep on working or taking efforts. These efforts may be for any purpose, e.g. study, employment, business, sports, developing personal skills, social contributions, etc. Everybody is busy in some or other activity.

It is rightly said that hard work cannot be avoided. But despite of everybody taking so much of hard work we don’t see everybody succeeding till the end. What might be the reason? Many of us believe that it may be bad luck or in common parlance we say “naseeb me hi nahi hai”. But this is not so. For any given achievement, luck works only to the level of 2-5%. If it is so, then what is the lacking element? That element is self-belief. Yes, self-belief.

It tends to happen that generally people keep on working without believing in themselves. If you just keep on working hard without believing in yourself, all your efforts will go in vain. The foundation stone for any structure of success is the self-belief itself. Without the ingredient call self-belief, the delicious success dish cannot be prepared.

We all know about the giant mammal elephant. If we observe carefully, this mighty animal, which can destroy strongest of the trees in the forest, is tied easily with the support of just a metal chain. If we compare the support given by the chain and the power of the elephant, the support is very easy for the elephant to break, but still it can’t. Why? The reason is that the elephant thinks that he cannot break the chain. The reason relates to its infancy. When the elephant was just an infant, and was tied to a similar chain, it was not possible to break it out. Since then, it has got in its mind that the chain is impossible to break. So after all it relates to the power of self-belief.

Similar is the situation of most of us in our day to day life. Students study with the fear of failure. Our mind is a case which can occupy only one sword, either belief or fear. But most of us carry the fear with us. It is very necessary for the students to stop worrying about failure and start believing in themselves. Students get the fear because of various inputs they get from various sources. No doubt, any exam in this world is hard to clear but it does not mean it cannot be cleared. The basic thing required for any exam is belief about oneself.

Not only students, but businessmen, professionals, sport persons, and people involved in various other activities carry the fear of failure in their mind. This fear does not let them achieve the results. To repeat again, only one thing can get rid of fear and that is belief. So not just students, but all other people who aspire to achieve new heights of success in life should first start believing in yourself.

In the beginning of this article, I have quoted one maxim. I repeat it here – God helps them who help themselves. I have an idea ahead of it and I know it works. Unless you believe in yourself, neither the world will believe nor will God believe. And if God does not believe in you, then I don’t think there is any possibility of achieving anything. So if you wish and pray God to help you then first believe in yourself, then help yourself and then only will God come to your help, that too if required.

So, the bottom-line is that if you want to succeed in anything you desire, first you should believe that you can and then start working on you. I am sure, the success is yours.

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