As a CPA, I am often in awe to see a lot of my peers are reading articles or advice provided by others without questioning, be they from the peers in our profession or even others who aren't in any kind of profession at all. An example is this article on billing rates for solo accounting practice and small firms (click to read). The article cited average billing rates for various services provided by small firms or solo practice, and yet it didn't say how many small firms were surveyed and what the sampling methodology was regarding to variances on geographic, years in practice, revenue range and client sizes. All it said was the data was obtained from a "new survey"? But it didn't say conducted by who and where?
According to the article, the average billing rate for tax prep is $110 per hour and $513 fixed flat fee. Throughout my years of hanging around in small firms, I have seen many fixed rate tax returns at $75, and also $150. As for per hour rate, many are charging under $50 and under $75. May be many of these low billing firms are totally eliminated in the survey? Recently, I have been having a hard time trying to get new clients from scratch, because many of them are telling me that they are paying only $125 for their tax returns with their CPAs. And I truly resent these low billing CPAs who are degrading the profession to those tax prep services inside the hair salons. But who can blame them when literally any doofus are allowed to practice tax, bookkeeping and even accounting. Auditing and attestation is the only service that requires a CPA license.
Now back to the topic, am I the only CPA out there who reads articles like this unknown survey and always feel this kind of data reporting should be left to be done by us, the CPAs??? And yet, many CPAs in America are very weak in Mathematics, logic or even basic arithmetic so many of us are totally incapable of writing even an article like that one which I consider it to be very inadequate and unprofessional. Lots and lots of us can't even write an email to begin with. In America, and particularly in California, everybody is providing accounting, tax and bookkeeping services. One of my former tax clients is actually doing it and she is telling me she is studying to become a CPA and she is now having her own bookkeeping practice serving a few law firms already. Her original degree is early childhood education but she couldn't pass the certification test to get a job at the kindergartens. Now she is taking evening accounting classes in some community college while providing book-keeping services. God bless her clients. I took a brief look on a few tax returns she did and they were full of outrageous mistakes. Her clients are unaware of these mistakes and seem to be happy with her because she charges only $30 an hour for her full charge bookkeeping service. Meanwhile, I am having a hard time trying to get anybody to switch to me when I am asking $150 per hour, even though I am a CPA with many years of hardcore tax and audit experiences.
It's really frightening and disheartening to see the billing pressure in the profession, and it actually feels much worse than the article reported.
Hi, I don't have CPA but have 15 years of experience as an accountant with a degree in accounting. (I didn't take the CPA exam after I graduated from college). I started as a bookkeeper to support myself in college and progressed (from a staff accountant, Sr. lease administrator, Sr. accountant, Sr. campaign finance/accountant, Sr. analyst) in various industries and later became a controller who specialized in the entertainment industry. I quit that job because of the abuse and the hostile work environment that I had to endure so I transitioned into another industry.Went on a temp assignment and realized that a leadership role in a traditional industry bore me and the agency saw that; I was later discharged. I went on another interview for another controller's position on my own and got passed up. I was fed-up so I called the CEO and asked why he chose another candidate. I had nothing to lose to demand of him that answer. He said I wasn't a strong enough candidate. I was chosen over 80 candidates and it came down between the other burly guy and me (I'm a woman). This happened in January of this year. I was desperate and angry; I felt that I did not deserve to be hungry because I was educated and experienced. A light bulb flashed - tax season! I was not licensed though so I had to study for my CTEC (I live in CA); so I had to cram 21 chapters. I got my PTIN to start. While cramming, I worked with a buddy of mine, who was not a CPA but had a small tax business. I was not doing taxes, but doing sales. At times, when it got busy, I would start on a return for him. He had an assistant who was licensed so I had no problem leaving him when I got license. As soon as I got it, I called EVERYONE who I knew. I applied my sales techniques onto them. As my buddy said, harvesting clients for taxes is about sales. The technical aspect is something that we can research on (he has a finance degree). He charges a fixed flat rate from $200-$500/return - he did 200 returns this tax season (he's been in business for 2 years and has no CPA - just a CTEC). In order to prepare returns, I shared my father-in-laws software because I didn't have EFIN yet. I charged $150 for standard, $200 for 1040 with a Schedule A, $250 Schedule C/E, $750 Corporate. Did 40 returns, 1 1040 - rest Schedule C/E and Corporate with bookkeeping. The small businesses needed a bookkeeper so I charged monthly depending on the transactions.
ReplyDeleteTo some of my friends who are CPAs and unemployed, I advised them to get angry with the system. While doing sales, to this day, I surprise myself with the "hustle" that I convey to my potential clients.
Now, I'm studying to get my EA and planning to earn my MBA.
I feel your plight about being unemployed but educated. In the end, clients don't care about our technical ability on the initial meeting, it's about how to draw them in. However, our technical ability allows us to gain their trust and confidence.
Good luck.You're educated and resourceful.
Thank you for the encouragement. You are correct, clients really don't care about our technical ability. I need to brush up my sales and marketing skills like you do. Thanks for the comment, it's very valuable to me.
DeleteHave you thought about teaching? You already the credentials.
ReplyDeleteNever thought about teaching. You mean teaching CPEs??
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