Part 1 - Introduction
Commerce has been one of the sought after course, especially in India in the last few decades. Commerce Post graduates/CA-Inter/ CA/CMA-Inter/CMA's are sought after by any organization be it manufacturing, Trading, Service Industry, Financial Institutions and such other organizations.
They are also sought after not only for Accounting, also for Stores functions, Banking operations, Indirect Taxation functions, Direct Taxations functions, to an extent Secretarial functions, Payroll functions and the list goes on and on.
A traditional professional with any qualification (as mentioned above), would like to acquire knowledge and grow in a specific area of his operations. Such as if in Accounting, he or she would like to be in accounting activity throughout and grow up the ladder.
To create the environment:
- A young qualified CA/CMA joins as Trainee/Junior level officer by taking an area of specialization, say Internal Audit, Accounting & Finalization, Reporting, Capital requirement assessments, Private Funding including Private Equity and such other and moves up in the designation ladder onto Middle level Managers or from small/mid sized company to larger organization. This process takes, say about ten years for a person of good caliber. Thereon, another ten or so years to move to an acceptably senior level in a large organization. (Here large organization refers to say 250 crore sized turnover company.)
- CA/CMA students, who clear the exams at a younger age grow onto in the same line of activity, possibly much faster.
We notice that a professional who gets into any specific area of operations moves up the ladder more or less holding onto the specific area of operation.
To add on, the professionals are quite contended about their job profile, the entity they are associated with and the relevant other aspects of their profession.
Now, this series is intended to open up the thinking horizons of the referred group of professionals onto other areas.
In Part 1 we shall be introducing the horizons to you.
What are they?
Let us look at industry requirements, as well to understand better.
Entities, engaged in say Manufacture, be it small, medium and to an extent large entities or organizations, look for professionals not only to perform the specific functional areas, but a professional who can extend to administration and related functions as well.
Giving that role a name, lets call such a professional an Administrator.
On the other hand we have a traditional professional introduced in the beginning of this article. He/she is a Professional functionalist
1. Professional Functionalist
A professional functionalist handles his own areas of work, say Accounting, Internal Audit, Payroll processing, to an extent financial calculations involved.
A Professional functionalist executes and delivers related to such functions and would be having thorough, if not in-depth knowledge of those functions.
Let us look at the areas a Professional functionalist would handle in detail:
- Accounting function: Day to day accounting including Banking of receipts , Sales Invoice generation, Internal Audit if required, Finalization of Accounts, Co-ordination with Internal Auditors till release of Audit Report, coordination with External Auditors till release of Financials such as Profit & Loss Balance Sheet by them.
- Direct Taxation: Personal Income Tax working for every individual employee after obtaining their personal financial relevant data. The entity's corporate Income Tax workings, its remittance by way of Advance Tax, Self Assessment Tax, as applicable, its finalization in consultation with entity's Auditors, its filing, attending assessments in coordination with statutory Auditors and the like till its finalization and receiving assessment orders. Appeals, as and when required.
- Indirect Taxation: Will handle collation of Data of Purchase, Sales in order to file monthly GST returns, Quarterly returns and such other requirements including Annual Return filing, its Audit, till Assessments and order release in coordination with Auditors wherever required and GST officials. Earlier it used to include Excise Duty, VAT, Service Tax and ofcourse Gift Tax, Wealth Tax as and when applicable.
- Payroll Functions: Preparation of monthly payroll, its disbursements, deductions towards Provident Funds for applicable salary slabs , Employees State Insurance as applicable, Income Tax as per individual employee workings, Salary Advance/s if any.
- Banking Operations: Includes day to day fund management including inflows and outflows. Collections from Debtors, Loan funds, payments to Creditors for supplies & Expenses. Disbursements for salary, Tax payments and the like.
- Forecasting: Fund requirements are planned in advance for a relevant period, say quarterly or for a year with break-up for quarter or half year as the case may be. Forecasting the Expenses for the relevant period to plan the Outflow of funds for a specific period in discussion. Based on the fund requirement, funds required periodically is passed on to sales/collection departments to meet the same.
- Internal Audit: Draft internal control policy if required, conduct regular checks and audit, review and review the policy and SOP to suit current requirements from time to time, co-ordinate with engaged internal auditor team as well if any, prepare a report to submit to the management.
A professional functionalist would take up one or all of these activities depending on the size of the organization.
On the other hand, an Administrator handles many areas, by having a dedicated Team under him/her. An Administrator may always not perform to display extensive knowledge on those areas of activity, but delivers with team members performing required roles.
A professional functionalist growth is limited to his specific role/areas of functions he takes up, whereas, an Administrator delivers all related areas as well apart from specific functional areas. An
Administrator then grows to become a Chief Executive Officer. A Chief Executive Officer combines his core knowledge area together with other many areas related to his function.
We will be looking into the details or an Administrator's role in the Part 2 article of this series.
The author, V Murali Dharan is a Chief Financial Officer in a Real Estate Firm and has industry experience of over 30 years in various fields say, Direct, Indirect Taxation, Company Law, Accounting - including identifying revenue leakage, Audit and General Management & Human resources
To read the second part of the article, click here