Factors contributing to the growth of Indian Start-ups
In recent years, the Indian start-up ecosystem has really taken off. A number of factors have contributed to such high growth like â€“
- Massive funding from private investors
- Intellectual entrepreneurship
- Evolving technology
- Higher disposable income
- Booming domestic market
Itâ€™s a revolution and has changed the life style of various stakeholders. Few years ago, no one would have imagined that Indian start-up would do so well and would give cut throat competition to its foreign counterparts. One major reason for such exponential growth of Indian start-up is easy funding. In recent times, the Government has eased a number of stringent rules that needed to be adhered to while starting business. The current Central Government also introduced single window clearance scheme which would ensure that business houses gets multiple clearances/ permission for conducting business at once. This has helped a number of start-ups and other existing businesses. This start-up ecosystem is creating multiple job opportunities in various sectors and functions of business. There is increased demand for qualified and semi qualified professionals belonging to various fields. One such major demand is for Accountants. In the recent times, with Indian start-up booming, it has created ocean of opportunities for Accountants.
Demand for Accountants by Start-up ecosystem
As discussed above, a lot of opportunities are created for Accountants by Start-ups. It is important to note that not only qualified Chartered Accountants are in demand but also fresher and experienced Accountancy & Commerce graduate are in demand. One of the important questions comes in everyoneâ€™s mind that why start-ups which are primarily technology based requires accountants? The answer to this question is pretty simple. A lot of money is being invested in these start-ups whether by private equity, venture capitalist, Banks or promoterâ€™s family. At the end of day, all the promoters and fund provider want to know how judiciously and pragmatically their funds are used. For this the startup needs to provide an accurate snapshot of financial performance, position as well as value of business. This can be done with the help of accountants.
Over the years, the process of accounting has evolved. Nowadays, itâ€™s not restricted to bookkeeping. With new start-ups coming around there is twist in tail. In new start-ups, the traditional accounting function are divided into various sub functions which are as follows â€“
1. Procure to Pay (P2P) â€“ This function is responsible for end to end accounting of trade payables. Here accountants are required to record purchase transactions, vendor payments, invoice follow up with vendor, giving details of vendor liabilities to banking team so as to pay off vendors.
2. Order to Cash (O2C) â€“ This function is responsible for end to end accounting of trade receivable. Here accountants are required to record sales, debtorâ€™s collection, debtors aging analysis, follow up with banking team to ensure timely payments by debtors/ customers.
3. Hire to Retire (H2R) â€“ This function is responsible for end to end payroll accounting. In many organizations this function is outsourced to third party. Here accountants are required to record month on month salary liability of an organization which is payable to employees and recording its payment during month end.
4. Banking Operations Team – This function is responsible for overall cash and treasury management within an organization. Their liaison with various functions and ensures cash & bank records are properly updated and reflect true and fair view. This function is very critical from organizationâ€™s liquidity point of view.
5. Record to Report (RTR) â€“ This function is responsible for overall accounting of an organization. It includes passing of month end journals entries like that of Depreciation, Income tax etc. preparation of financial statements and coordinating with external auditors to get financials audited. The members of this function liaison with various members of above mentioned functions and ensure that respective General Ledger (GL) are reconciled with its sub ledger (SL) and proper data flows to trial balance (TB) in order to ensure smooth closing during month-end, quarter-end and finally year-end
It is worth to note that all the above functions require accountants. They are the owners and are responsible for day to day accounting activities. Depending upon the nature and size of start-up, each of these functions requires a number of accountants. Typically these functions are headed by Chartered Accountants who in turn reports to Finance Controller.
Apart from above there are number of functions which are performed by Accountants because of which they are in demand by start-ups. These are as follows â€“
- Helps start-up to be statutory compliant by ensuring various taxes and returns are timely deposited and filled.
- Helps in measuring financials performance by preparing & analyzing financial statements, doing ratio analysis, comparing budget versus actual performance etc.
- Helps in filling financial statements with regulators, tax authorities, investors etc.
- Helps in preparation of various qualitative and quantitative reports.
The growth story of Indian start-ups is worth celebrating. With Governments, both Central and various states, giving a number of incentives to business houses, the number of start-ups will bloom in tier II and tier III cities. As compared to western world, Indian start-ups are still in nascent stage. So there is enormous demand for accountants in present as well as in future. As an accountant, it is important for us to tap this opportunity. In order to have edge over other, we can undertake various accounting and analytical courses/training and be ready for this sea of opportunities. Remember it is in our hand to shape our future.
If you are looking for a short term course, then EduPristine offers one, which is known as Post Graduate Program in Business Accounting and Taxation (PGP-BAT). This course will give you in-depth knowledge about Accounting and Taxation and make you job ready.