Are CPAs and Accountants Properly Informed On Competitive Billing Rates??

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.

A Tempting Exodus of The Public Accounting Slavery

From what I've observed at all the small firms I've worked so far, and from what I've heard from my peers at seminars and networking events, starting an accounting practice can be the ticket for me to get out of my current misery with my employer.   I am gradually seeing the 3-step process in starting an accounting practice and I am calling it the 3 Exo "P"s:

1. Planning 
2. Practicing
3. Profiting 

Now, I just hope that I have the time to pull it off, and the courage to part the sea... no, I mean to part with my employer.

What about you?  Where is your key to freedom?

My First Attempt in Getting My First Tax Client

A while back I met a lawyer at  my first and last happy hour for 2012.  He recently referred to me someone who needs a CPA to back file several years of tax returns.  I was so very excited and I started to dream about quitting my current job and having my own tax practice.  Well, such a dream turned out to be very short-lived.  This person whom the lawyer referred to me turned out to be a total flake.

After wasting my time emailing with this person and talking to him on the phone, I was so excited that he agreed to come into my office with his accounting records.  I was so looking forward to the appointment.  But he never showed.  He totally stood me up. I called his office several times and he just dodged my phone calls.  I left messages with his employees but he never called back.  I emailed him few times also trying to re-schedule his "missed" tax appointment.  He never emailed me back.

This flake wasted my time talking to him on the phone, answering his tax questions only to later pull a no-show on a scheduled tax appointment.  He didn't have the courtesy to call or email to cancel.  He didn't have the decency to even return my phone call or email to apologize for his no-show.

I am going to black list this guy's company and him and I swear to never give his company any business or pay my visit at any business that he is affiliated with.  I will warn my clients about this guy if any of them have the misfortune to be solicited by this guy's company.  A flake like this can't be fit for any one to do business with or to even work with.  This explains why he and his company haven't filed taxes for the last few years.

Now that I realize how hard it is to get a client, I have more respect for my current and former bosses for getting enough clients to pay for my salary and benefits.  Building a small accounting firm is definitely no easier task than getting a job from a Big 4.......Why is it so hard to get tax clients?  How can I get my own tax clients? Until I can answer these questions, I guess I better be back to job hunting instead of client hunting....