Mr. S Venkatadri is the co-founder and partner at Venkat, Kollali & Murthy Accounting firm in Bangalore. He has worked with IOC and HCL before deciding to move into an entrepreneurial role. Claiming that Accountants are more than just bean counters and auditors, he has also consulted on project feasibility and take-overs, trying to wring the last bang from that elusive buck.
Q. What prompted you to setup your own practise rather than work in a company?
The desire to set up practice was primarily prompted by my mindset which was too independent and forthright. This attitude was not an ideal one when you work in a structured environment. Moreover at that point of time monetarily too employment had its limitations. Secondly practice, I felt, allowed one to utilise the acquired knowledge in a wholesome manner. In a job you tend to get compartmentalised.
Q. What are the challenges in setting your own professional services firm?
The main challenge when you set up something on your own, that too with no godfather, is to initially establish your credibility. But to a certain extent I had this credibility since I had worked in industry and also in a fairly large consultancy firm. With my background I did have a good break and from then on it was a question of maintaining qualitative service.
Q. In the industry dominated by the likes of PwC and KPMG, what do you think is the future of upcoming professional services firms in India?
Frankly when I started practice the big firms had their own set of clientele which was distinctly different from the one individual and small firms were looking at. Moreover most of the Indian entities were small and could not pay for the services by big firms. Currently with even small companies going global and with most of the companies having higher operational levels there is a tendency now to go for big firm by fairly large number of companies. But still there are bound to be opportunities for new entrants to cater to the needs of start ups. The new entrants should not be individuals but a group so that they can provide a basket of services like Income Tax, Excise, Service tax etc. This can allow them to get composite assignments from medium size and start up firms which can sustain them. As industries now a days offer a good starting remuneration the desire to get into practice on their own has been declining. So only those who have the confidence and skills to compete with the best can survive. Definitely there is enough space for entrants given our economic growth and increasing regulatory mechanisms which are to be taken care off.
Q. How important are ethics in accounting? Is it really true that accountants make 1+1=5?
In any profession for that matter ethics is very important. Lack of ethics can lead to serious erosion of credibility. In accounting profession where the reports submitted are subject to scrutiny by various statutory authorities one has to abide by the standards formulated by the professional body as well as adhere to the laws which are in force. With reporting formats getting highly regulated subjectivity in reporting has considerably reduced. There are still cases of misadventure by accountants but these are exceptions than the rule.
There can be instances where accountants do certain adjustments which can mislead a common man. Like an instance where a major expenditure on launch of a product is absorbed over a period of 5 Years. Even though this affects the cash flow for the current year and if written off fully in the P&L account in the same year would have resulted in lower profits for the year, by ammortising over a period it can lead to an impression that the company’s profits are better than what it was. This treatment even though is allowed under certain circumstances cannot be easily accepted by a layman. This is only an illustration and there can be many more commercial adjustments of this nature in accounts. Yes there are instances where bad assets are continued to be shown as good resulting in misrepresentation of the state of affairs of an entity. As a general rule accountants are supposed to enquire into every figure reflected in the accounts as to its genuineness and its realisability and then form their opinion and state the fact in their report . Not that the accountants make 1+1=5 but may be they show Re1 asset as Re5 asset which many a time due to lack of information provided by the company. If it is done want only it tantamounts to fraud.
Q. Your message to budding entrepreneurs.
As I had stated earlier there is still scope for budding practitioners provided they have the confidence and desire to excel. They should have the inclination to be a perpetual learner . There has been a sea change in business dealings with the type of globalisation going around and every entrant needs to update his skills accordingly. In any profession only top 10% in terms of competence can survive. In a single line I can say BE A LEARNER ALWAYS AND NEVER COMPROMISE ON QUALITY SUCCESS AUTOMATICALLY FOLLOWS.
