Let's talk about a very general reality between a Client and their Statutory Auditors
- Statutory Auditor would meet you personally Once in a year and have a look at your Accounts Quarterly if you are interested in paying Advance Tax
- The Client would be sending the data for GST return filing on a Monthly basis, but that’s really Mechanical after a few initial months and done by the Junior Staff without any Holistic look at the Transactions and Exception reports.
- The Statutory Auditor will point out Non-compliances and Defaults for August 2019 in August 2020 (the client would hardly recall anything of the sort )
- There is a general one-time evaluation of your Personal Accounts at the fag end of the Financial Year when it’s the last opportunity to pay the Advance Tax.
Clients Needs in Changing Times
- Clients want a Quarterly Report of their Profit / Loss so they could know the standing of the business
- Non-Compliances and Exceptions be brought to their notice by the next month end or maximum 3 months (High possibility to recall things and even resolve)
- Save Interest Cost for Delayed Tax Payments – Most Important – why unnecessarily pay to the Government instead You can hire an Internal Auditor
- Personal Accounts be updated Periodically generally on a Quarterly basis for more appropriate tax planning and payments.
- Minimize the delay and defaults pertaining to TDS, GST, Profession Tax, Equalisation Levy, International tax, Corporate Law, FEMA, RBI matters.
- Most Importantly, clients realize that Income Tax Returns and Taxes cannot be given Ignored for 11 months of the year as every penny saved is a penny earned.
- A Cost Benefit Analysis – Remunerate the Internal Auditor for his timely work as he/she would have already saved great amount of Interest Costs with timely inputs.
Benefits of Hiring an Internal Auditor/Supervisor
- Monthly Visits for Analysis of Data
- Guidance to Accounts Team and Informal Training
- Preparation of Tax Calendars customized to your Organisation
- Guidance on Storing and Retrieval of Files and Folders
- Report Exceptions and Non-compliances to Management in a monthly 1 Pager Report
- List down To-Do List and push for execution with the Accounts Team
- MIS Reporting to Management
- Guidance regarding updated laws and clarificatory circulars specific to your organization
- Improved Processes and Productivity among various teams viz sales, purchase, logistics.
- Reporting to the Management for any inconsistencies requiring the attention and immediate interference.
- Guidance on Tax Planning for Personal Accounts ( which is generally a March to March Phenomena )
The Author is a CA in Practice and Proprietor at R C D & Co., Chartered Accountants, Mumbai. He can also be reached at firstname.lastname@example.org