Chartered Accountants are a vital part of a company's financial wellbeing, and its sustenance is dependent on the CA's ability to ensure all the compliances set by the law, not just with regard to taxes but also by saving on critical resources like time and money that would be otherwise spent on penal proceedings and litigation down the road.
In a way, Chartered Accountants are pre-emptive actors and first line of defence with respect to the company while lawyers usually come in after the fact, when disputes and problems have already materialised. Most of the SMEs and start-ups, and even traders and small businesses definitely have an in-house accountant and a consulting CA whether they have a legal department or not. The CA is often the go to person for everything legal till a company can hire in-house lawyers or put lawyers on retainership, which happens at a very mature stage only. CAs tend to take up the mantle of default advisors and consultants, and this phenomenon creates some unique opportunities if you can acquire some expertise outside the traditional body of laws and regulations that all CAs are required to learn.
For instance, CAs are often relied upon to procure various labour law registrations and ensure labour law compliances. Similarly, CAs may be expected to advice on all the legal procedure for applying for a tender or government contract, or even monetization strategy for intellectual property assets of a company. Clients even ask CAs to help them with contract templates, and indeed some CAs have the skills to help with the same. The same goes for environmental compliances, and advisory in emerging areas like CSR and sexual harassment.
Clearly, CAs can and do offer a lot of services outside the crowded domain of tax advice and corporate compliances, the traditional bastions where competition is also the highest. What are the emerging areas with less competition where CAs can offer their services, provided they are willing to acquire or have relevant skills?
As I started to research for this article, I called up a few CAs to get their take on what's relevant, what more they would like to know about and the likes. I was blown away by the fact that when I put forth my queries about specific laws, say CSR or FDI they could recite the exact corresponding articles and subsections from the Companies Act of 2013. Most of the Chartered Accountants I have interacted with, turned out to be solution providers and not mere service providers, which is very rare phenomenon in India. Almost all of them, were equivocal about wanting the profession to move from its pre-existing compliance and advisory mode to something a bit more evolved.
The new economy keeps throwing more challenges, what with, cryptocurrency revolution, documentation moving to smart contracts and block chain, demonetisation and the introduction of GST. All small firms and independent CAs have to update and innovate if they want to maintain a foothold in the industry. Chartered Accountancy already faces stiff competition with increasing passing rates in CA exam and smaller companies using CS, Cost Accountants and even B.Com. Graduates for compliance and maintain accounts instead of paying a premium to CAs. This forces young CAs to specialize rather than just doing vanilla work. As a CA you are more than aware of this phenomenon and stay ahead of the curve by exploring new areas already.
As a CA you have some invaluable skills and insights at your disposal that you can use expand your area of expertise and your earning potential as a whole. Let us take a look at the areas of work that hold enormous growth potential for CAs now in 2018 as well as in the next 10 years to come.
#1: Labour and Employment Law Compliance and Advisory
All the laws regarding labour and employment come under the broad category of 'Employment Law'. It is responsible for protecting the rights of the labour force and with the help of amendments and judicial clarifications in the Industrial and labour laws, balance the interests of employers and employees. India is expected to rapidly reform its labour laws, and a lot has already been changing, to make India a competitive place to do business since its labour laws are often considered backdated and unfriendly to new age businesses. Still, India has hundreds of labour legislations that are complex to understand and follow.
Labour laws enumerate the various rights and obligations of the employees and employers. It covers a range of issues from employment contracts, payment, procedures, settlement of dispute, statutory compliances, maternity benefits, leaves and holidays, workplace injury and compensation, gratuity and provident fund related issues, registrations and maintenance of various statutory registers and such other aspects.
Why do you need to know about it?
CAs are often expected by clients to take care of all the compliances. Clients automatically come to CAs for employment related compliances as well. There are definitely specialized firms that handle only employment law compliances. However, most SMEs and traditional business folks find it more comfortable to deal with their existing CA rather than roping in a new services provider. As a CA, with the necessary knowledge about labour laws and procedure, you can create an additional area of practice and revenue stream by taking care of these compliances and even advising clients on the same.
Some of the areas to explore here are:
- Policy drafting - Various workplace policies such as whistle blower policy, conflict of interest policy, CSR policy, anti-sexual harassment policy etc. - you can make a suite of policies and provide the same to your clients with customization as required.
- Labour law audit - offer a labour law audit to your clients. Most of them are stuck at various degrees of non-compliance and have no idea
- Offer registration services - there are many registrations required under labour laws for both manufacturing and white-collar offices. Most of the time SMEs have no idea about these and big companies are happy to outsource what they consider to be drudge work.
- Maintaining various records, registers and displays - India has a plethora of labour laws under which many records, registers and displays are supposed to be maintained. You can help your clients to become compliant with these laws.
Here is a comprehensive and practical online course on labour and employment laws.
#2: Contracts
Commercial contracts include joint venture agreements, terms and conditions for services, vendor agreements, purchase and supply agreements, service level agreements, franchise agreements, shareholders' agreements and lease and rental agreements amongst others. Many business agreements are quite simple and does not require massive amount of legal knowledge to either draft or negotiate. Steve Jobs once said that every modern man should learn how to read a contract. A smart person, with minimal experience, can easily work with a good template and churn out a decent business contract in a large majority of business situations. While one could go to a law firm for expensive contract drafting services, which is often justified when stakes are high, for day-to-day matters simple standard form templates do just fine.
Why do you need to know about it?
Bigger accounting firms usually collaborate with legal teams to make templates for all the necessary contracts a company might need, from employment and founder agreements to vendor agreements. These need to be updated regularly keeping the latest laws and changing business scenarios in mind. Chartered Accountants are asked to advise on contractual matters once in a while because of their vast knowledge of compliances and regulations, but primarily because not every contract is worth hiring lawyers.
To improve your chops on contract drafting and even negotiation, try out this contract drafting and negotiation course. Clients often look at their CA as a friend, philosopher and guide. If you are able to advice clients on their contracts, or explain to them about the merits or demerits of a clause, it will only increase your value as a trusted business advisor.
#3: Government Tenders
Organisations, institutes and governments send out formal structured invitations called ‘Request for Tender’ to prospective suppliers or publish in the newspapers or designated notice boards to submit a bid to supply particular products and/or services. There is an elaborate bidding process. Government being a big spender, clients can make a lot of money from a tender if they get it. However, the complexity of this bureaucratic process requires them often to get some expert help.
Why do you need to know about it?
As a CA you can be very useful to any supplier looking to secure a government contract. You already have much of the prerequisite knowledge regarding compliances, conditions and regulations to help in this process. However, a specific knowledge regarding how government contracting works, laws, regulations and important judgment related to tender and bidding process is necessary.
The Government has come out with a lot of strategies to help SMEs especially to ensure that they get a good part of the government contracts available. Many tenders are reserved for SMEs and small companies. These SMEs, many of which may already be your client, may not have gotten started with government contracts. As a CA, you can open that door for them, guide them and as a result, help them to grow.
You can learn more about managing government tenders from our certificate course on Government contracts, tender management and regulations.
A lot of businesses can do better only if they have a more knowledgeable person guiding them through the process. As bigger consulting firms hardly ever consult smaller businesses, you can fill the void and manage the tender applications for these smaller suppliers.
#4: Due Diligence
Due diligence refers to a comprehensive set of steps taken by a prospective buyer to appraise and get an accurate understanding of the assets, liabilities and commercial potential of the deemed product. Due diligence is very important as it enables you to understand and fully grasp the positive as well as negative outcomes of getting involved or investing in something. CAs have always been involved in financial and tax due diligence, which is part of every M&A, investment deal and any large finance round. However, CAs are not always comfortable with conducting a legal due diligence, nor is it appropriate for CAs to give legal opinion. However, with a lot of growth (and deals) coming from the startup market, there is a need of professionals who have a broader understanding of things and possibility of hiring multiple professionals is limited. Clients in this market prefer a professional who can look into all the sides. This gives CAs an opportunity to be more competitive if they understand the legal due diligence process apart from financial and tax due diligence.
Why do you need to know about it?
Chartered Accountants are very well aware of due diligence with years of experience starting right from articleship. If you want to succeed and advance in your career, you have to be very good with your due diligence. You need to be thorough and detail oriented. Every CA has had enough exposure to due diligence and yet you see some being better at it than others. Due diligence is a very hands on process and requires a lot of time and effort, but it also opens you up to bigger things since it is so obviously needed. A CA having additional knowledge on legal side due diligence can be very impressive.
If you would like to be more proficient with regards to your due diligence skills, check out our certificate course in investment and banking due diligence. Start taking due diligence more seriously. After all, the ability to be improve and stand out can only come from perfecting the basics.
#5: IT (Information Technology) Laws and Compliance
Information technology has changed the way the world works. Things that used to take days are now completed within hours and minutes. A single person can now run an entire business thanks to IT. Information Technology is a technical domain that runs parallel to all modern industries and helps in making them more efficient. IT laws and regulations, and compliances under these laws have become extremely important especially under increased cyber threats and information distribution concerns. There are also areas like e-waste regulations and compliances regarding the same.
Why do you need to know about it?
IT has updated the entire process. Gone are the days when CAs were thought of in the same vein as a “munshi”. Today's CAs have access to an entire new world. CAs are now expected to recommend the best practices to management and reduce costs to aid savings while focusing on improving profits. They must also advice their clients on compliances under various information technology laws, such as data protection, having the right paperwork in place for online businesses and even policy issues at times. If you are looking to expand your expertise in a new area, then IT laws is definitely a great option. You can, for example, gain expertise in e-commerce & fintech regulations. You could also get a well-known certification in cyber law for increased credibility in this field.
#6: Intellectual Property
Intellectual property law refers to the rules and regulations that secure and enforce legally binding rights to one's inventions, designs, literary, technological and artistic creations. IP includes copyright, trademark, patents, geographical indications, design rights etc.
Why do you need to know about it?
As IP is becoming increasingly important to a large number of businesses, in booming sectors like media, technology and pharma, the CAs who work with them are increasingly facing IP related issues. The work varies from valuation of intellectual property to licensing and assignment deals. Building and enforcing internal standards for managing IP portfolio is also a major area of work where CAs have natural proclivities and these fit nicely into existing responsibilities. CAs can benefit a lot by learning more about IP laws, regulations, IP contracts and best practices in the market related to IP. If you are looking for a quick enhancement of your IP skills, check out our certificate course on Intellectual Property Law. One major development is that CAs can now file trademark and copyright - so even the government is waking up to the potential of CAs is contributing to better management of intellectual property in India.
#7: Corporate Governance
Corporate Governance refers to the system of rules, regulations and practices by which a company is directed and controlled. It basically involves balancing the interests of the company, its' investors, the shareholders, the workers, the suppliers, the vendors, government and the community.
Good, stable and a well thought out corporate governance system is responsible for the smooth operation of any company. It identifies the rights and responsibilities among all of it's' participants. In fact, listed companies which are known to have amazing corporate governance receives a premium in the marketplace as investors consider the risk of investing in such companies to be much lower. Especially foreign investment flows mostly to only such companies, which makes every listed company very interested in corporate governance. CAs being the quintessential business advisors, can play a big role in corporate governance. In fact, many of the most prized independent directors, and even executive directors are well known CAs.
Why do you need to know about it?
Chartered Accountants need to apply fine principles of Corporate Governance when called upon. You have the potential to do a lot in this field. You can provide specialized guidance in designing the code of conduct, risk management framework and all the regulations associated with them. You can also work on things like whistleblowing policy and implementation, sexual harassment policy and implementation, conflict of interest policy etc. Managing finance of the company is another major area of work for CAs, but they can sometimes fall short on knowledge in certain specialized areas such as negotiation of term sheet for investment (for angel or VC investment), FDI or ECB regulations, or maybe corporate insolvency resolution.
If you want a kick-start your knowledge of corporate governance, check out this certificate course in corporate governance.
Corporate Governance is one of the more important tasks that come across an accountancy firm desk and it is not just plain corporate compliance. There is a strategic angle to corporate governance. So make sure you update your skills to match the demand.
#8: SEZ Laws
Special Economic Zones (SEZ), which are specially designated zones where export oriented units function under relatively easy laws and regulations have been attracting massive amount of Foreign Direct Investment and number of announced SEZs stand over 500 already. Out of these, according to the government, as of December 2017, 222 were operating. SEZ is serious business as most of export oriented manufacturing, services and trade is quickly shifting to various SEZs.
Interestingly, SEZs have unique rules, regulations and compliances. Very few business advisors have any in-depth understanding about laws and regulations surrounding SEZs. This is an excellent area of practice to target. If you want to quickly catch up on SEZ laws, take a look at this online course.
#9: CSR (Corporate Social Responsibility)
Corporate Social Responsibility refers to the role that corporations are expected to play in meeting the agenda of sustainable development by providing a balanced approach towards economic progress, social progress and environmental stewardship.
Even though CSR in India tends to focus on what is done after the profits have been made, as per the Companies Act of 2013, India became the first country in the world to mandate and quantify CSR expenditure. It effectively requires certain big companies to give a minimum of two percent of its profit to charity.
Why do you need to know about it?
Since the landmark legislation passed, there has been a considerable increase in the CSR spending by companies. CAs are often called on to audit CSR projects, and even handle CSR committees that companies are required to set up. Shortlisting, approving and coordinating CSR projects also require qualified professionals with financial acumen. Concepts like “inclusive growth” and “responsible enterprise” are actually being used to bring about better corporate governance. You can make a positive change in the society by spearheading or advising on effective CSR projects. Here is a university certified CSR course that can help you to get some instant credibility in this area.
#10: FDI (Foreign Direct Investment)
Foreign Direct Investment refers to an investment or buying equity interest in a company by a foreign entity or investor or acquiring business assets of one country by an entity based out of another. FDI is a critical part of India's economic growth and is a major non-debt source of capital for India Inc.
Foreign companies look forward to investing in India because of the lower cost of resources and wages as well as special investment privileges that the Government of India offers.
Why do you need to know about it?
Many accounting firms as well as independent accountants have already jumped on this bandwagon over the last 2 decades as FDI juggernaut has so far been unstoppable. FDI related work usually pays very well. If you have the knowledge about the regulations, compliances, documentation, usual negotiation points and restrictions about FDI in different sectors, you too can serve as an advisor to corporates looking to get investment and investors interested in Indian businesses. This is also a great way to get into a M&A.
Check out this certificate course on foreign direct investment and regulations.
#11: ECB (External Commercial Borrowing)
External Commercial Borrowing basically refers to a loan availed by an Indian entity from a non-resident lender. These loans are mostly provided by foreign commercial banks or financial institutions. ECB is one of the prominent forms of foreign funding.
The Indian Government has a very comprehensive policy regarding ECB that regulates the flow and puts the necessary restrictions, interest rate ceilings, maturity period, ceiling on total amount borrowed et cetera.
Why do you need to know about it?
ECBs provide the opportunity to borrow a significantly large amount of money with a possibly longer terms and lower interest rates. As a CA with a substantial knowledge of corporate law and the regulations surrounding ECB, you can help corporations raise ECBs from internationally recognised sources like banks, international markets, et cetera. These deals help secure a substantial cash reserve which can be used to help the company jump leagues ahead of the competition if used well. There is tons of work for CAs to do in this, including project viability reports, RBI compliances, general advisory and preparation of documents.
It is also good idea to specialize in ECB from a specific country. For example, Japan has been pumping in billions of dollars in soft loans in India. If you had specialized in ECB from Japan over the last 5 years, it would lead to incredible professional growth at this time. It is important to see where things are headed and prepare ahead.
Here is a course which can get you started on laws related to institutional finance and ECB.
#12: M&A (Mergers and Acquisition)
Mergers and acquisitions - the inorganic processes through which businesses attempt to achieve exponential growth, new market entries, vertical expansion and a lot more - have always been a special area of interest of lawyers, bankers and CAs. As the stakes involved are usually very high, this work pays extremely well.
Why do you need to know about it?
M&A has been a tough practice to break into. However, in India the M&A industry is growing quite fast, with ever expanding and formalizing economy combined with the national push towards a digital India working its way with the startup culture. There is a lot more M&A work than ever. However, trained professionals are few. You have to understand that the startup boom of the last few years have created a new window of opportunity in the M&A market in India which never ever existed, and it seems that the window is growing bigger with the startup ecosystem maturing. There are fewer frivolous startups, but funding and acquiring activity is really frenetic. Apart from full acquisitions, acquihires are quite in vogue.
As a CA, you are already likely to have quite a bit of knowledge on the subject matter. However, M&A are complicated processes that require a lot of legwork, and new practices are always evolving in this high speed high stakes market. Most of the big companies in the world, employ one of the Big Four alongside their legal firm to handle and oversee M&A. However, currently, a lot more than just fortune 500 companies have started to engage in M&A deals. In fact, M&A is quite hot right now in private companies' space, apart from mid-cap and small cap. Even SMEs are looking and M&A with technology companies leading the pack.
Not all acquirers are comfortable with paying big firm fees. If you have a look at some of the most successful companies in the last decade, they have grown from small startups in somebody's basement to multinational conglomerates by always expanding. Even relatively smaller startups are always considering acquisitions and acquihires. As a CA, you have a clear opportunity to help yourself and your firm by learning as much as you can about M&A. Accountancy firms generate a lot of revenue through M&A. You can learn more about this from this Certification in M&A Law course.
#13: Import/Export Laws
India's import and export processes are regulated under the Foreign Trade Act of 1992 and the EXIM (Export Import) Policy. These laws regulate both the processes while simultaneously categorising and classifying all the goods involved. As import-export dynamics dictate a significant part of the national finances, these laws are very judiciously implemented and enforced.
Why do you need to know about it?
Import-Export is one of the most profitable commercial avenues that exist in the world now. A lot of this money-making operation depends on the knowledge of the people that undertake them about trade barriers, taxation rules, customs regulations, et cetera. These laws are changed internationally on a regular basis depending on financial stability or diplomatic relationships. As a CA, if you are well-versed in import and export laws of the country and can make the effort to learn about others, you can find yourself a very good position as counsel to companies and organisations that are involved in this business.
Make the move, go out there and reach out to any import/export enterprise for yourself and for your firm, you will surely find opportunities to actively consult regarding these regulations. You can get a headstart on learning export-import laws from this Certification course on Import-Export and Customs laws and regulations.
#14: Fintech Laws
The fintech market is relatively new to India. It started as small mobile payments initially and has since grown into a vibrant and diverse market. Fintech generally refers to companies that use technology to provide financial services. Fintech-specific laws have still not been placed in the country although RBI has certain regulations in place. SEBI has formed a panel to oversee fintech's impact on the market. From cryptocurrencies changing how banking is done around the world to creating new asset classes, blockchain technology making headlines every day, digital goods in games like Second Life becoming a billion dollar economy, fintech is probably the fastest growing sunrise industry today. Many professionals would love to get a piece of this pie except that they have no idea how to.
Why do you need to know about it?
As India doesn't have up-to-date fintech laws, it is in the perfect sandbox situation. This has made India the hotspot for the global fintech market. Every major and minor player is coming to India also because of its massive market which is extremely cash heavy. Currently there are no major restrictions or prohibitions to the fintech market although stricter norm are rumoured to be put in place soon. This gives every CA a unique opportunity as a man with the know-how. You can utilise the pre-existing knowledge of corporate laws, acquire fintech specific knowledge and make good money by helping out the burgeoning bandwagon of companies starting up in this space or looking to enter the Indian marketplace.
Let me give you an example of how big the stakes in fintech can be. One of the most significant transactions in this space would be PayU's acquisition of Citrus Pay for USD 130 million. This is one of the largest full cash transfers in the history of the world. All of this is happening in India right now and you can make it work for you. Even Reliance Jio has announced a cryptocurrency, and all of the stock exchanges are looking into how blockchain can help them. It is definitely one of the most exciting industries right now. If you would like a more detailed in-depth look into the subject, you can check our certificate course on e-commerce, fintech and law.
#15: Startups
We are keeping this so low in the list because this is already a fairly crowded space. However, there is a lot of opportunity for this market to grow in coming years, and CAs who specialize in startup related work have a great demand in the market. At the lower end the work is very simple and competition is steep, but as one goes to the higher end of the market, work is sophisticated, competition is few and pay is good.
Focusing solely on venture funded companies is probably a bad idea, though they can make excellent clients too. Those who are new in this area should start with sustainable but small startups working hard to claw their way up the value chain. Long term bets are likely to pay off better at this point of time in the startup market. Also, noticing new and important trends are important. At the moment, machine learning, blockchain and AR/VR are the major trends in the startup world. The next trend could be adaptive security architectures, or voice command solutions. There are many possibilities, but a startup advisor has to identify trends early so that they can be at the right place and the right time.
If you are interested in learning more about things that will help you to be a great startup advisor, check out this course.
#16: FCRA (Foreign Contribution Regulation Act)
FCRA is a consolidating act whose entire scope is to regulate the acceptance and utilisation of funds received from foreign entities as donations by Indian citizens or not-for-profit institutions. Foreign contribution can be beneficial for people but can also be used to undermine Indian sovereignty and national interest and so it is very important to regulate flow of donations coming from foreign countries.
Why do you need to know about it?
A lot of NGOs and other non-profit organisations alike are supported by funds received from foreign donors/initiatives/groups. Just like companies, NGOs and not-for-profit societies, trusts and foundations also need a CA. Especially in this area, a CA with precise knowledge of the regulations and conditions, as well as experience of dealing with the government is critical. This is a good and undervalued niche with good potentials wherever there are many NGOs. However, watch out for the fact that flow of donations to India from abroad has been significantly reducing over time.
Since the 2015 crackdown by the Government of India on foreign contribution, you have a plethora of potential clients who have been left unaided without the means or the knowledge to overcome the new, stricter norms. You can assist these organizations as a CA, helping clients to register under the required government regulations and follow all the prerequisite conditions in case they would like to continue to receive foreign contribution. Since these need to be renewed regularly, it has scope for return business. You can learn more about this area of law from our certificate course on FCRA and regulation of foreign donations in non-profit sector.
Can CAs do any legal work?
I have taken into consideration the Chandigarh High Court's ruling on legal work being done by non-legal personnel, the changes in representation of clients in front of tax tribunals as well as the lawyers' complaints against the Big Four accounting firms. However, these incidents haven't changed the fact that CAs are the choice of advisor for businesses and not-for-profits alike. While lawyers have a role to play in disputes, prevention is better than cure and that is where CAs play a very important role. Lawyers may not be very happy about some CAs taking away potential clients and work, but CAs are entitled to offer advice, not legal but from statutory, compliance and management angle. For example, if a CA decides to offer legal risk management services, there is zilch that lawyers can do to stop him from doing so. It's absolutely legitimate and legal. CAs can positively impact the economy and the legal system by providing services in the areas described above, and sometimes they may have to provide these services in collaboration with lawyers or company secretaries or bankers too.
We understand that there is a growing sentiment amongst Chartered Accountants to expand into new and less crowded areas and rightly so. Many have already started taking steps to do so and for this, we would highly recommend specialization. Bookish knowledge is rarely enough, what one really needs is practical experience to get things done quickly and smoothly. Online courses that help you to build such practical skills rather than theoretical and academic knowledge should be preferred. Take full advantage of the online learning revolution!
All the best!
Courtesy: Rounak Chaki
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