Now let us take a look at the additional areas of an Administrator handled together with a Professionalist's areas:
It is true that Budgeting includes forecasting, collation of future data for an assigned period with regard to Sales Budget, Purchase Budget, Man Power budget includes new recruits, Capital Budget covers capital investments in an assigned period on Machinery Building and the like, Expenses Budget, Cash Flow & Fund Flow statements. This includes division-wise, business vertical-wise break-ups etc.
Budgets so prepared are broken into convenient periods, such as monthly, quarterly etc. Such budgets which are prepared for a period, say a year is prepared atleast 2 to 3 months in advance which is then finalized & frozen in consultation with Managements, Board as relevant. After completion of such period/s, budgets are compared with Actuals for the specific period/s. Then a Variance Analysis is drawn to compare & report it to management/Board, as the case may be.
A Project report is predominantly prepared for a new project wherein Land cost, Building construction as required with costs, Plant & Machinery Cost, Manpower needed and its cost, Power requirements & its costs, Expected sales, required Raw material & its cost are estimated and captured. This is one part of it which is the total project cost wherein working capital is also included. Interest Costs on the project funding is worked out.
Upon ascertaining the Project Cost with over 95% accuracy, the next task of Project Finance is also arrived at. While doing so, depending upon the Industry, margin money has to be projected, which could vary from minimum of 25% and up to 50%. This Margin money has to be brought in by the promoters which may include a portion from generated profits if it is a running company.
Term Finance arrangement
When a project gets finalized, (which by itself is a long process) next targeted task would be to raise long term finance for the project which involves discussion with one or more Bankers. Depending on size, security, repaying capacity Banks could be identified be it a Nationalized Bank, Foreign Bank, a Co-operative Bank or an NBFC. While deciding on the same, interest cost, moratorium period needs to be appropriately built in. Then documentation process starts with progress reports, duly certified by Auditors on the amount spent, submit those documents to get the funds released till implementation of the project.
CMA Data for Bank working capital
The Concerned Professional could also get involved in submission of Annual data in relevant form. These are in addition to quarterly Stock & Debtors report submission, annual stock verification signed by Auditors, Bank's auditors stock & debtors verification etc. Periodical charge creation with MCA Portal need to be attended to which is a compulsory requirement for both Term financing and working capital financing, in case of Private Limited/public limited companies/LLP.
Human Resources department
It has been a general practice in Industry sources that Commerce Professionals handle a limited extent of related functions.
HR functions, generally include Payroll preparation & its disbursement, PF, ESI, PT, IT deductions & its remittance/s, New recruit salary, left employee settlement, Overtime, Maintain Leave records, Submission of various returns under Factories Act, 1948 and Labour Act includes payment of Wages etc, Dispute resolution, redressal, conciliation and mediation, Voluntary Arbitration, Adjudication and Court of Inquiry.
In an LLP or a Private Limited Company, functions generally include adhering to the requirements of Companies Act which predominantly maintenance of Minutes book for Board Meeting and AGM, Register of shares, Annual filing of Balance Sheet, Annual Return, apart from Directors appointment/resignations, creation of charge on assets to Banks/FII's for loan facility/ies availed, Release of charge upon loan closure, Notice, Annual Report of Directors', the date/s which bears significance and such other functions.
Generally in a Manufacturing industry/entity, oversee general upkeep of the premises, all concerned department activities such as Security Office, Inward & Outward movement of vehicles & personnel, Stores department activities, Purchase & Vendor Development activities, Sales department movement of materials & its collection realization, Quality Control departments functions for both incoming materials and outgoings, weighing scales certifications.
The above functions includes those of several departments such as Productions, Quality Control, Purchase, Sales, HR, General Administration and such alike.
Inspite of checks present at every department and step, leakage takes place in a systematic and orderly manner without its detection for a long time.
- Say a simple water cans supplier, supplies a number of cans on daily basis but gets billed for a higher number.
- Branch office could report to its Head office, with a large gap of information, even in sales, Debtors, collections etc.
- Cash Pilferage/non deposit of collected cash are other common types of frauds.
These types of Fraud detection/leakage of revenues happens in all types of entities/sizes of entities. We come across some which gets reported.
A few trained and experienced Commerce Professional performs regular audits with a dedicated team, to detect and stop these revenue leakages.
In any organisation or an Entity, there will be certain basic legal necessities that may not call for a Legal Advisor's /Advocate's involvement such as creating an Affidavit, Simple agreement with a Capital Goods Vendor, Scrutiny of Customer's legal documents, Issuance of a Legal Notice to an absenting employee, verifying Bank legal documents for its execution by the entity/Company including Letters of Credit/Bank Guarantee/s, ascertaining the correctness of notice/s received from various sources such as Govt. agency, replying to Show Cause notice/s, if any, received from Pollution Control/labour department etc.
Though not a core area, shedding the inhibition and getting into these areas would help acquire knowledge and introduce new areas of expertise.
It will not be out of place to mention that a certain Accounting professional often gives a standard reply that I am already handling too much of work hence will not be able to add additional areas of work.
An Accounting Professional FORGETS that adding additional areas as mentioned above would only make his CV more attractive, apart from gaining more knowledge. Your current employer will always reward a knowledgeable employee who gives more quality output.
IAS Level Posting
Recent Government dispensation has about a year ago has announced that there can be direct recruitment from suitable personnel for IAS level administrative posting.
Could this NOT be viewed as a boon to Accounting Professionals? Especially CA's, CMA's & CS?, who opts for Career in Accounting & related fields.
Than a mere Accounting & Finance Professionals, an Accounts professional with above additional exposure would stand a better chance to up the game?
It is worthy to mention that CA's/CMA's & CS have all the capability to climb the ladder and occupy this position!
There are a lot of opportunities in Private Sector, to take up the role as an Administrator running a company or an Strategic Business Unit.
To sum up, Accounting Professionals with a Professional qualification, can climb the ladder in a corporate environment and become a Chief Executive Officer too! Provided they acquire necessary skill set during their professional journey!
Let the readers look forward to see more such achievers from this profession and students set their eye, plan, have a thirst to acquire more and more knowledge, set target keep moving ahead in their career path to achieve !
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.
Tags :professional resource