5 Steps you can Follow Before You Start your Chartered Accountant Firm

Author: Aditya Sehgal

Chartered accountants form the backbone of the Indian financial system. Professionals with a CA degree working in established firms remain involved in management and planning of finances and taxations pertaining to business organisations and individuals. However, a staggering 45% of chartered accountants in India run their own practice rather than doing a job.

With the implementation of GST and other related reforms in the taxation system, the demand for knowledgeable CA firms are presently on the rise. It has thus created significant business opportunities for these stand-alone firms. Every CA aspiring to start his/her own practice must leverage this opportunity of the growing demand for CAs in India. Probably, it is the apt time to invest in a business venture for these professionals.

You can avail a chartered accountant loan to fund the expenses associated with setting up your own practice. However, there are certain facts you must know about before delving into the new venture.

Certain steps to follow while starting your new firm

Below mentioned are some specific step-by-step guide to starting a new CA firm. Following them would help your firm run smoothly.

Step. 1

Plan according to your expertise and offer services as per your convenience. Set a proper mission for your firm and work in tandem with acquaintances and clients to achieve the same.

Step. 2

After you have set the mission of your CA firm, select your target consumer niche. This will help in achieving your preferred client base in the least possible time.

Step. 3

Prepare a financial plan before starting your business. Also, analyse how to finance your CA firm. Proper financial planning will help you make the right use of a professional loan.

Step. 4

Identify investment avenues to generate returns. Focusing on areas like marketing, software and the office infrastructure, skilled manpower, etc. will support the smooth functioning of the organisation. A proper cost analysis will also help you understand the capital you would require.

Step. 5

Chalk out the cash flow to analyse the long-term profitability of your firm. Having proper cash flow will save you from the capital crisis. You can always avail a chartered accountant loan to keep cash flow stable.

There are specific eligibility criteria that you need to meet to avail a CA loan.

Eligibility criteria to avail such loans

  • 1- You should hold a 4 years Certificate of Practice while applying for a loan for chartered accountants. Your certificate should be active at the time of application.

  • 2- You or your parents should own personal assets like a house or an office in an area where your lender is operating.

Documents required for loan application

There are specific documents that you would be asked to provide when you apply for a chartered accountant loan.

  • 1- CoP - You will have to provide a Certificate of Practice that would be active for 4 years till the date of application.

  • 2- Proof of assets - You will have to provide the ownership proof of your assets like a house or an office.

  • 3- KYC documents - Documents like Aadhaar Card, Voter Id, PAN Card, Driving License, etc. are mandatory.

While you apply for a loan to source funds for your CA firm, research thoroughly about the lender. Enquire about their interest rate, pre-payment and foreclosure charges that are applicable along with other terms and conditions associated with the loan. Having answers to the above mentioned queries would save you from facing issues with your loan. Also, analyse your debt-to-income ratio so that you never fail to pay your EMIs.