By Madhukar N. Hiregange | Vasant Bhat
Chartered Accountants
INTRODUCTION
The pandemic was / is unprecedented, a time of extraordinary change for everyone in every facet of life. It has affected people in most parts of the world directly or indirectly. People have lost their near and dear ones, their occupation / livelihood, or limited their lifestyle with the focus only on basic needs. It has changed drastically how we think and behave. It has bought most families nearer (in some cases even caused strife). Life used to be very mechanical in metros while we were chasing our materialistic / professional dreams. It was challenging irrespective of our educational qualifications, the profession or occupation in which we were engaged. The fear of contracting the virus and uncertainty thereafter created a tremendous scare in all of us. However, for us professionals commitment to clients is paramount and in their time of need we need to support them even more.
At our firm we went back to the basics – our purpose, vision and mission. We took a month to understand that this is a long haul and saw how we could support the clients as our first job and then looked at support to all other stakeholders; we also got what we call our knowledge edge initiatives. We started immediately as most of the staff and partners were suddenly free. Many of the measures taken by us in this period have been adverted to in this article which had a positive impact on the entire eco-system of stakeholders. In retrospect, however, there was much more that we could have done.
ASSESSING THE SITUATION
The first thing to be done in such uncertain times is to take stock of the things on hand, understand how the lockdown would impact everyone. Some of the areas we chose to concentrate on were as follows:
* Ensuring the safety of the employees. Some might have been stuck on outstation assignments. Arrangement of the basic needs, stay and travel was essential for them.
* Assessing the work in progress and completing the services possible for clients.
* Getting each and every employee in the firm updated and given in-depth knowledge – level wise.
* Suo motu reducing the fees of the first quarter work as a signal of support to the clients on 1st April, 2020.
* Looking at what value-added service to provide to all clients without visiting them. This was focused more on specific training / knowledge dissemination.
* Improving the connect of the team leaders with their teams and also with the partners. Understanding their needs and seeing how we could fill the gap.
* Restricting the drawals and deferral of salaries for a period of five months. Once the situation was in control, adding the deferral month-wise.
* Investing in automation for office use as well as for clients’ use.
* Faster geographical as well as size expansion was possible. Virtual opening / puja done.
Assessment of possible support to clients in the difficult situation
We believed that once a client engaged us, it was our moral responsibility to provide all possible value-addition during the difficult time. When a firm has been retained for regular advice or periodic audit, even a small value addition would make a big difference. The CA profession is based on trust and these measures would build / enhance trust. We voluntarily reduced the fee to the extent of 25% for three months and gave other support of value-added services based on information already with us without charging any fee.
Assessment of the possible inflow of information from the client
As a CA firm, we need to get the relevant information on time from our clients for delivery of quality service. Whatever problems we had faced in terms of manpower, infrastructure, etc., the same or even more has been the case with our clients, too. Further, the clients had many other priorities and therefore follow-up on calls and recording of the conversations on email was encouraged. Based on the correct assessment of the possible reduced inflow of cash from the clients, the working capital was planned and even a loan was taken.
Assessment of jobs which can be done and which can be deferred
The statutory compliances did get postponed. It was important for us as well as for our clients to assess what jobs could be done during the lockdown and what jobs could be deferred. Some parts of the jobs could be completed and the rest would have to await the opening up for completion.
Assessment of jobs nearing due dates and action plan
Since the lockdown was announced suddenly, the work stopped abruptly. There were many time-bound assignments / compliances. It was certain that the due dates of all the compliances would be extended, but there could have been other implications. In business many things are inter-related. If one task gets delayed, then another one also gets delayed, and so on, and at the end the impact is on the financials and the cashflow. All jobs like review of ledgers, reconciliations, online verifications, even examination of documents / agreements where available, were taken up. Advice on best practices in the lockdown was also shared with every client.
Assessment of manpower availability and action plan
Just before the complete lockdown, or immediately after the announcement, many employees and workers left for their hometowns by whatever means they could find. The trade / industry employer had to assess how many employees were available for working from their homes during the lockdown and what infrastructure they had in their place of stay. For us, articles / assistants from rural areas somehow reached their hometown but of them some are still (even after nine months) to get back to office.
Assessment of the IT infrastructure availability and action plan
The CA firms can use technology to some extent but the profession cannot be fully automatised. The CA profession is intellect-driven and not machine-driven. Our firm has been using office management software and servers for many years for data management, albeit partially. We were able to catch up on that. We were able to adapt partially to the work-from-home philosophy. We quickly prepared a policy for that and a standard operating programme for the same. As we were maintaining most of the data in the cloud, the employees could get the same and helped us to continue with quite a few of the jobs on hand. However, we had some issues where data was in servers.
Assessment of the working infrastructure at the homes of the employees
Work-from-home has its own challenges, especially in metros where houses are generally small. If everyone works from home, there has to be a proper place to sit and work. Continuous working in uncomfortable positions leads to health issues and reduces productivity. Normally, internet bandwidth is not very high at homes. The internet speed available on cell phones is not sufficient for office work, making conference calls, etc. Further, even to make simple calls there could be a challenge when someone else in the home is talking.
We informed our employees to go for best possible internet connection and also for a basic working table and chair. However, those employees who had gone to their villages where internet facilities are not available, just couldn’t work from home.
PLANNING AND THE EXECUTION OF THE JOB
Having assessed the available resources, the infrastructure and the jobs to be done, proper planning had to be done to execute the same. Since the situation was unusual, the execution of the regular jobs was also a challenge. Further, as a CA firm we have to maintain the quality of the deliverables. The quality was to be achieved through more involved monitoring. In the work-from-home situation, the monitoring also needs extra planning and efforts. The seniors in the firms made the plan for the effective monitoring of the execution and the deliverables through regular conference calls, video calls, etc. The use of office management software like Windows Office 365, iFirm and such other software has been of great use. Sharing the data and monitoring have been both convenient and effective. The hands-off approach (delegation) was given up and micro-management with daily calls and follow-up was taken up till the employees started coming back to office.
MANAGING THE CASHFLOW
One of the most challenging aspects has been managing the cashflow. Where the clients have cashflow issues, the CA firm cannot expect timely payments from them. The biggest expense in a CA firm is the employee payouts. A cut in the salary was inevitable for not only the employees but also for drawings of the partners. However, a cut in the salary should not result in an employee leaving the firm. An efficient employee is an asset to the firm. Retaining an efficient employee is very important for its growth. The salary cut was based on the ‘Manu Principle’, i.e., more cut in case of an employee earning more and less cut in case of an employee earning less. Striking the balance between cashflow and keeping the morale of the employees high has been very important. We brought down the targets to ensure that bonus would be possible for most based on performance. However, we did defer the increments this year.
KNOWLEDGE ENHANCEMENT INITIATIVES
As a CA firm, knowledge / skill across the firm was a key to our success. However, in the normal course the knowledge acquired tended to be on the need-to-have basis. This pandemic gave us an opportunity due to the availability of time. The explosion of online education, most of it freely available, supported this endeavour.
HEALTH ADVISORY TO THE EMPLOYEES AND MENTORING
An abrupt change in lifestyle affects health, especially in the case of senior citizens at home. The employees were advised to be very health-conscious, maintaining hygiene, social distancing, using face masks, avoiding crowded places, etc. This pandemic has created huge mental pressure due to a lack of knowledge about its spread and its impact. We believed that moral support by the employer to the personal health of the employees and their family members would boost their morale. Getting an adequate insurance cover for all for Covid-19 was done to provide some succour.
Regular mentoring of the employees during such times is very important. Not only does it enhance the capability of the employee, but it also improves the productivity and loyalty to the firm. Though mentoring was an irregular activity in our firm earlier, its importance was felt even more during this pandemic. Confidence-building, personality development, knowledge enhancement have been achieved to a reasonable extent through training and mentoring. Many took on longer period commitment to paid coaching to enhance themselves.
Daily discussion on the clause-by-clause analysis of the tax laws
Every day, two hours (for two months intermittently) of discussion through video call among the employees on clause-by-clause analysis of the tax laws has enhanced the knowledge of the employees tremendously. A lot of clarity emerged on the provisions of the laws. Such discussions helped us, in spite of our presence in multiple locations, to have a uniform view on the provisions of the laws.
Deliberation on the landmark decisions
The regular deliberation on landmark case laws among the core group in the advisory and litigation team of the firm was very useful. Such discussions helped us in the interpretation of the ratio of the judgment and its effective use in the given situation.
Preparation or updating of the audit programme, checklist and process document
We used the available time for updating the audit programme, the checklist and standard operating procedure in all streams of operations, such as audit, advisory, dispute resolution, etc. We also looked at various operations like human resources management, client engagement, deliverables, data management, accounts administration, all of which are a must for efficient management and growth of the firm and to deliver quality service. These had been on the backburner for years.
Office re-organisation
In normal times, everyone in the firm would be busy. Once the deliverables are delivered, the file is closed. There will be no time to re-look at the file except when there is a requirement subsequently. This added up to the quantity of paper in the office and data in the hard disc / server. Such unwanted accumulation of data would make it difficult to retrieve the relevant data in the future. During the pandemic, the spare time was used for cleaning of the unwanted papers / files in the office, unwanted data in the hard disc / server and proper organisation of the relevant data and audit papers / documents in some of our offices.
Training the employees of the client
Efficient service to the clients sometimes depends on the quality of data provided by the employees of the client. Where the employee of the clients is properly trained about the compliance required, the form in which the data is to be provided would certainly help the CA firm. During the pandemic, time was utilised for training either all the employees of our clients, or through tailor-made training programmes. Such knowledge enhancement of the employees of the clients has been a value-added activity.
Webinar – Knowledge sharing
Continuous education is a must for every chartered accountant. Sharing knowledge is a good way of learning. A well-structured webinar delivered by an expert would always be well attended. However, it should be as per the Code of Conduct of the ICAI. We conducted several webinars on various subjects inviting our clients and known CAs. We also ensured that we took the opportunity to accept any invitation to speak, especially if it was a challenging subject.
Certificate courses
Since time was available and employees of companies / professionals were available at home, we conducted a number of GST certificate courses. We allowed / mandated / encouraged the employees to attend such courses. Many senior employees were allowed to teach in internal learning sessions and then joined the seniors for public seminars.
Book-writing, revisions and writing, updating the articles
During the pandemic, we could reconsider updating our old books and take on some planned books. We were able to write more than 70 articles and update several existing articles on the website. The updation of the website to some extent has also been done.
Self-empowerment initiatives
The pandemic has provided a great opportunity to introspect and take self-empowerment initiatives. Many great institutions all over the world have been offering online courses in various subjects. Some of them are free and others are for a fee. It was time to set goals and make positive choices and take control of our own lives. It was time to understand our strengths and weaknesses and to develop the belief within. It is true that every challenge is an opportunity to grow. Some of us have participated in a few such self-empowerment programmes.
Expansion
As we were able to spare some time, we started a branch in a metro city (on 10th August, 2020). Mentoring was possible because of the slack and now we are ready to open offices in three Tier II cities before March, 2021. We also decided to have smaller offices due to the focus on online training and seminars.
CONCLUSION
It is a fact that we could choose to react to this dreadful epidemic by focusing on professionalising the firm, empowering ourselves and our employees. The future might not be the same as was the past. The future appears to be more virtual. We believe that it is better to invest in technology, adapt to the change and go digital. The flip side of the pandemic was that it provided a lot of time to introspect and look at the issues on the backburner. The familiar ‘I am too busy’ trope was not available and professionals like us did much more to strengthen the depth of knowledge, catching up with training, took up updating books and articles and, importantly, the one-to-one interpersonal activities increased significantly.
On the whole, we got better prepared for the delivery of services remotely as well as attracting clients due to higher visibility and sharing. Our multi-locational presence has helped us to leverage and support each other because the situation was not so bad in a few locations. Thanks to all these foundation-strengthening activities, we are poised for major growth in F.Y. 2021-22 even though the pandemic is still affecting some locations.
Money is like a sixth sense – and you can’t make use of the other five without it
– William Somerset Maugham
