Define what your business actually needs
Sole proprietor (self-employed, ₹5 lakh annual income): Needs basic bookkeeping + annual tax filing. Budget: ₹5,000–10,000/year. Growing business (₹50 lakh+ annual, employees, VAT): Needs payroll processing, monthly VAT compliance, audit support, quarterly reports. Budget: ₹50,000–100,000/year. Large company (₹1 crore+, multiple jurisdictions): Needs statutory audit, transfer pricing compliance, financial planning. Budget: ₹200,000+/year.
Describe your business honestly: 'I am a freelance consultant with ₹30 lakh annual income, no employees, simple personal expenses, no inventory.' vs. 'I run a manufacturing business, ₹2 crore annual revenue, 20 employees, complex inventory tracking, multiple bank accounts.' Different needs → different consultants.
Ask the consultant: 'Have you worked with businesses like mine?' Example: A consultant who specializes in manufacturing may not be ideal for a service business. Sector expertise matters because compliance requirements differ (inventory tracking vs. service delivery hours, for instance).
Ask what services they do NOT offer: 'I handle tax filing and bookkeeping, but not payroll or audit.' Knowing their limits prevents surprises when you need something outside their scope.
Verify professional registration
For chartered accountant (CA) services in Nepal, ask for: Full name, CA certificate number, membership with Institute of Chartered Accountants of Nepal (ICAN), registration date. Example: 'I am Rajesh Sharma, CA, ICAN membership #1234, registered since 2015.' Verify this by calling ICAN directly or checking their website.
Why this matters: CAs must meet rigorous education and ethics standards. An unregistered 'accountant' has no oversight; if they make mistakes or commit fraud, you have no recourse. A CA has professional liability insurance and ethical obligations.
For general tax consultancy (without CA credentials), ask: Training/degree (B.Com?, MBA?), years of experience (5+ is good), professional memberships (if any). Example: 'I have a B.Com degree, 8 years in accounting, and am training for CA exams (currently Level 1).' This person is competent for basic work.
Red flag: 'I am an accountant' with no verifiable credentials. Do not use them for statutory filings.
Clarify the exact service scope
Ask for a written scope of work: (1) Monthly bookkeeping (recording income, expenses, payments), (2) PAN registration (one-time), (3) VAT registration (if applicable), (4) Monthly VAT compliance (if VAT-registered), (5) Annual financial statement preparation, (6) Annual tax return filing, (7) Any audit support, (8) Quarterly reports?
Example trap: You agree on 'accounting services' for ₹10,000/month. Later, the consultant says: 'Payroll processing is not included; that is ₹50/employee/month.' Now you are paying ₹10,000 + ₹1000 (for 20 employees) = ₹11,000. Worse: An audit requirement surfaces, and the consultant charges ₹50,000 extra. Get the full scope in writing upfront.
Ask: 'Who is responsible for gathering documents each month—you or me?' Good consultants: 'Send me receipts, invoices, bank statements each month, ideally within 5 days of month-end.' This ensures timely, accurate records.
Ask: 'What is the deadline for submitting documents if I have a filing deadline?' Example: Tax return is due March 15. The consultant needs documents by March 1 to prepare. If you delay, your return is late, and you face penalties. Get this timeline in writing.
Understand the fee structure
Three fee models: (1) Fixed monthly retainer (e.g., ₹10,000/month = ₹120,000/year, predictable), (2) Per-service (e.g., ₹5,000 for tax return, ₹500 per month for bookkeeping = costs vary), (3) Percentage of revenue (e.g., 0.5% of annual turnover). Ask which applies and get an estimate.
Fixed retainer is simplest: You know the cost, no surprises. But if your business grows significantly, the consultant may ask for a fee increase. Get this in writing: 'Fee is ₹10,000/month if annual revenue is ₹50 lakh. If revenue exceeds ₹1 crore, we will renegotiate.'
Percentage-based fee (common for growing businesses) aligns incentive: The consultant benefits when your business grows. Example: 0.5% of ₹1 crore revenue = ₹50,000/year. But read the fine print—what counts as revenue? Gross or net? Does it include GST?
Ask about extra charges: 'If I have an audit, or if tax law changes requiring extra filings, do I pay extra?' Example: Normal year costs ₹10,000. An audit year costs ₹10,000 + ₹25,000 (audit support). Get this in writing so there is no surprise.
Ask how deadlines and compliance changes are handled
Ask: 'How do you track my filing deadlines?' Good answer: 'We maintain a calendar. PAN renewal in June, VAT filing by 13th of next month, annual tax filing by March 15. We notify you 10 days before each deadline.' Bad answer: 'You tell me when you want to file.' The consultant should be proactive.
Example trust issue: Tax deadline is March 15. Consultant does not notify you until March 14—too late. You miss the deadline and face a penalty. This is the consultant's responsibility. Get it in writing: 'Consultant is responsible for proactive notification of filing deadlines at least 10 days in advance.'
Tax rules change every year (rates, deductions, categories). Ask: 'How do you stay current? Do you attend training? Do you subscribe to tax update services?' A consultant who reads only last year's rules is dangerous.
Ask: 'If tax law changes and affects my business, when will I know?' Example: VAT rate changes from 13% to 15%. Does the consultant immediately flag this and explain the impact? Or do you find out when you file and realize you miscalculated all year?
Keep control of your own records
Request regular access to your financial records and reports. Example: 'Send me a monthly summary by the 5th of each month showing income received, expenses paid, tax liability, and bank balance.' This lets you monitor your business and catch errors early.
Many consultants hold all records ('I will keep originals in my office'). This is problematic: If you fire them, you might lose access to your own records. Or if they face legal issues, your records get entangled. Best practice: 'You keep originals, I keep digital copies in cloud storage.'
Back up key documents independently: Scanned receipts, invoices, bank statements, previous year tax returns. If the consultant's office burns down or they disappear, you still have records. Use Google Drive or Dropbox—free, secure, accessible from anywhere.
Review summary reports monthly, not just at year-end. Example: Monthly summary shows income ₹3 lakh, expenses ₹2.5 lakh, profit ₹0.5 lakh, tax liability ₹50,000. You notice a big expense that you don't recall—catch the error now, not at year-end audit.
