The best model I’ve seen is you charge $700/month to small businesses to do their bookkeeping and tax returns. In the end you charged $8400 for the year, and even though it takes a while to get the bookkeeping right, once it’s tight you can really streamline your time on everything. Tax returns get done fast, bookkkeeping is pretty straightforward and delegatable to a $50/hr bookkeeper.
Do not take on 1040s. There is a reason there are a ton of orphans, it’s a terrible business.
We have implemented parts of this model, I do over $250k
This is pretty much what I do, but in a very specific niche market. I currently work for a firm but I will be taking it over in the next 5 year. Controller level work, plus bookkeeping, plus ad hawk CFO services all in one package is a very easy thing to sell people on.
Yeah it’s not a model that’s original to me. And we don’t do it exactly either, so I doubt you work at my firm haha, but we might go to the same professional conference (Pasba)
Transaction volume isn't even relevant anymore these days, it's more about the amount of non standard transactions and the different amount of transactions.
The client who has the most bank transactions of all takes me like 10 minutes a month. It's all automatically processed.
That depends on how much you automate, 8k is a fair amount of money for which you can do an administration, an annual report and tax reports for a lot of businesses. Even if their revenue goes into the millions.
Because I am in NL I have to deal with the international VAT and for those clients we just set them up with a good invoicing program and save ourselves hours.
But idk how good the American accounting software is, the CRM software is generally pretty terrible.
Yes, but I find they are not as profitable.
My 15-20k billable HNW clients are far less time than the billable equivalent of mom and pop stores.
The most profitable method is value billing.
I think its saying by having a set and low rate that nets almost 10000 a year if you can find 26 similiar clients you can easily get to 250k and outsource for a fraction of the cost.
The business model is volume and velocity not magnitude of client -- as i am sure it is harder to land 10,000 per month clientele than it is 700 per month clientele
That being said, it’s a LOT easier to find 5 $300/mo clients than 1 $1,250/mo client. More admin and involved, but sometimes you need to fill the gaps and pad the book of business.
It checks out. Small business with 300 transactions monthly. Charge 1500 for business return. 350/mo bookkeeping. 150 for payroll. 100 for sales tax filings. He may be off by a few thousand but if you know the client front and back that bookkeeping will take barely a whole day after all transactions are in per month.
I’ve always wondered about doing this….how does this work? Do you work out of their ERP? Do you bring them into yours? Do you integrate with any kind of sales system? The small business owners I work with are mostly paper based and I not super computer/tech literate so I can’t imagine wrangling the data as an outsider to get accurate revenues and expenses. Much less depreciation/inventory/fixed assets
They have to come to your systems. Any exception drives my pricing up a ton.
And I am very careful about which clients to take. Would not take any clients who are not tech literate
You can also make a lot of money by charging that 700 a month and then automating the hell out of it. These days you can get so far with automatic bank imports, automatic invoice processing etc.
Setting your clients up with a good invoicing program will save you a ton of time. Especially if you (like me) are in Europe and have to deal with national and international VAT.
Generally some of the worst things on the automation front are cash, creditcards and stock.
Is that to little or to much? $50/hr with 1500 billable hours is $75k/year, which is a pretty good salary in most places. And if you keep them busy, you can bill $200k for each one.
The same people saying that’s too much are the same people I’m going to see complaining about not getting paid enough in the profession.
$50/hr might seem like a lot for a bookkeeper but you get what you pay for. If you’re paying that much then you’ll have every bookkeeper in the city lined up to work for you since countless others pay $20-30/hr.
In the end, you get your choice on a very skilled bookkeeper who will give you good work, you still get a very high margin on bookkeeping work, and because you paid more for an experienced bookkeeper and don’t have to micromanage an incompetent one, you have less things to worry about as a business owner. Win win for everyone.
This is what I’m also wondering. It’s not the 50/hr though, it’s the “$700/month” part mentioned above. How many hours of bookkeeping is required if you’re charging $700/month for that particular client? 1 hour, 2 hours, 7 hours?
I’m curious, because I’ve seen the model before, but not sure how to price it accordingly.
how small are small businesses? as a CFO with extra time on my hands i've thought about offering my bookkeeping services but also feel like i would be lacking the intimate feel with the business if i am only doing it part time.
That is the challenge. Can you systematize such that you don’t have to in the business every day, while still providing real value and real reporting to them.
I do this individually as a side gig on top of my salary job but without the tax returns. Flat fee bookkeeping is bread and butter and very easy. Works out to over $200 an hour on average.
Great side income but I would have to charge more if I had overhead and a firm.
If you don't mind me asking how do you onboard clients/what would be the best way for me to learn how to do something similar? I am a CPA but would love to start my own Controllership type businesss.
I pretty much built (and sold) my firm on advice from the book "Built to Sell" and the Future Firm group. First of all you receive playbooks on all aspects of running a modern accounting firm. The forums are super helpful. Also he does a monthly call where you can get your questions answered.
😹 rent a casket is the way to go. Caskets can be 6K, rent one for $800, and they still put you in a nice sealed container.
They would, essentially file a $0 return?? My grandma passed, retired, no annuity, so we didn’t file one for her. I’m wondering if that was a mistake. 👁️
CuratorOfYourDreams nailed it.
But to explain, they’re an individual tax return with no association. No business/schedule c/extra work besides the return itself.
These clients can be fired and replaced by the dozen. Usually you bump their fees just to make it worth keeping them.
There will never be business growth, they don’t refer “good” clients, they’re a headache, and they only come around in the busiest time of year.
These types of clients are only good if they have some sort of complexity. I’ve seen 20k 1040s that were excellent clients because they were very complex high net worth with 60+ K-1 investments that needed year round planning.
I don’t make 250k yet, hopefully on the next couple years I will be.
I do about 500 of these types of returns at my firm each season. I can do a return that I bill $300 for in about thirty minutes. 2 of these per hour is around $600/hour and people pay on the spot when I pick them up. People overlook these type of returns but they provide a nice chuck of revenue for easy/low risk work, and they come back every year.
Right now clients are easy to come by, as the uproar with the government and all the tax law changes seems to make people more apprehensive to do their own returns. For the most part Facebook and a website gets enough clients, but that will likely change moving forward. Right now there’s a lot of accountants retiring so it’s been much easier the last few years to get clients.
They can leave, and sometimes people do. Typically you never lose more clients than you gain though. If fifteen leave, fifteen new clients usually come in that year to take their place.
*15 come in at a higher price to replace the 15 that left. Increase prices on new clients annually- keep the prices generally the same for established clients.
I bring in that revenue. I have a building/office and three employees so all that doesn’t go right into my pocket. It sets in the business account and dwindles down through the year in the form of wages and other costs.
Another thing i should make clear is that I can prepare the returns in that 250ish hours, but there’s more time involved in having the returns reviewed by another accountant, and assembled and gotten to the clients by a clerical/administrative employee, so it’s not a straight 150k in a small amount of time.
yeah getting 10-20 loyal business clients in an LCOL area that would pay more than $500 a month is quite a challenge. I do about 500 orphan returns then a couple book keeping clients. Hopefully i can reorganize and rescale
Don't charge less than $1, 200 per tax return.
If you are doing an S Corp and it's owner 2k is not too much.
This allows you to focus on high paying clients rather than working on a million $200 returns.
For services targeted at small businesses like bookkeeping or tax preparation: have small business owners in your network (not viable for most of us) or be an excellent salesman who is capable of cold calling small businesses and delivering a convincing sales pitch in a way that doesn't sound like you're trying to pull off a confidence trick or some other financial scam.
I imagine a lot of of people start in public, either building relationships and taking them with you, or you do work on the side until it gets to a point where you go on your own.
being friends with people who are wealthy or own businesses.. or have parents that are wealthy/own businesses
I knew a guy whos dad was a solo CPA practice and 90% of his clients were from his religious community.. he was clearing like 200-300k off his practice and also had a regular six figure 9-5 job on top of that back in 2017
First clients was a referral. Clients 2 - 150 saw me giving interviews about filing taxes and they booked appointments. Since then- new clients either know who I am from those interviews or are referrals.
Minimum fee for return is $500, weeds out the riff raff. Focus on businesses (plenty of small businesses that are still sole proprietor) which most are well above the $750 mark. Charge $300/hr. Profit
Outsourced CFO and controllership for 3 clients. Took on two bookkeeping clients because it's relatively easy work, but it comes with the requirement to also do the business returns. Ended up taking one a few other business returns and the personal returns of the owners.
If you are good at it and help build a clients business it can get tricky to level up your business. started this way and ended up with one client 225k, next 47k and the third at 36k. Not wanting to miss out on the client of a lifetime these three end up so much special work I could not delegate and crowded out the rest of my business at the time…
I have one large specialized client and 3 cfo/whole package clients. Gross is probably $250k this year. Plan for a few more cfo clients next year ($2k/mo+)
It varies honestly. I can offer everything from basic bookkeeping and tax prep to payroll to full advisory with HR etc. I tell entrepreneurs I do all the parts of their business they don’t want to do.
Yes. One client is advisory reselling my services that grosses about $180-$190k. Another is $45-$50k. One is about $20k. The other was $10k last year but likely will double this year.
Cash flow to me is a bit over $250k. This includes salary, business loan P&I payments and some personal distributions.
The ideal situation is to keep the returns where they’re at and start adding in recurring work (bookkeeping, advisory maybe cfo) or just buy a bookkeeping book of business and offer tax services to those clients as well.
Then get rid of all the returns that yield less than 3-400 dollars.
I did some private equity gigs/other work and really got my start when my wife started a biz that needs very good records and used that to leverage new clients.
There is a huge need for 1040 preparers. I do around 1000 returns a year, a mix of small corporations, sub-s, partnerships and 1040s. Most of the 1040s have either Scedule C, F and/or E. I also offer bookkeeping and payroll services, but that is only about 20% of my annual revenue.
A simple 1040 that I can complete in less than 10 minutes would be a minimum of 150. My most complicated 1120s is 4k takes most of a day or two if I have everything without questions. So, I actually don't complain about 1040s when I am making around 1000 an hour. Lol
Idk what tf an orphan 1040 is I guess cause I'm Canadian
I'm sort of cheating because like half my income comes from my day job and the other from my firm. I think the easiest sell imo is an all in one package, I'll do your monthly bookkeeping, the financial statement compilation, and the tax return. It feels a lot more reasonable to charge 500-2k a month, depending on number of transactions/complexity, than to hand them one huge bill after filing their taxes. I still do more year-end with no bookkeeping than with, but I started out with a couple of those all in one clients and it grew from there
I do personal taxes as well, I charge 500 minimum and they usually take under an hour to do and it's really mindless. Sometimes I'll have a client with a really complicated situation, and I'll contract out the work to a local firm I used to work for
Solo 1040 as others have said. The reason a lot of people try to avoid them is because they are the lowest revenue, smallest margin, inefficient (you still have to onboard clients and figure out everything for the first time) and you have to do VOLUME to make any real money.
We talking self employment income or t2's potential.
These ain't that easy t4's from regular employment or t4a's for grandma collectin her pension though.
Yep, they give me their bank statements and their invoices for AP and AR but I've never contacted a vendor or anything on behalf of clients
Payroll is extra but I'll do that as well
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I do fractional CFO services for one large client that I charge a monthly flat fee engagement. Then I prepare about 225 tax returns (S-Corps, Partnerships and 1040s). During busy season I probably work 50-55 hours per week, and the rest of the year 25-32 hours.
You can't just go out and hang your shingle as an auditor though. There is a reason why pretty much every small 1 man shop is tax, bookkeeping and "advisory" with no audit practice.
That's due to quality review standards. It's technically possible with one and to work in coordination with another shop to trade QC. But ya, two is better.
I'm solo but I wish I made $250k. I make about $130k but I'm doing all the work myself. If I hired help and tapped into my network, I could do $250k easily. I've just been dragging my feet. My industry is very niche.
If you are in a niche industry, I would highly encourage that you raise your prices. You have tons of value from knowing what problems the client has before they even talk to you.
I focus on startup/small business/professional service accounting and bookkeeping, and fractional CFO work. Trying to pull away from hourly ad hoc services, and away from taxes starting next year. I'm currently trying to take the next step and grow further - recently hired an employee finally but struggling to generate leads at this point and have somewhat plateaued.
Does anyone have suggestions on software programs to use to offer these bookkeeping and advisory services?
This is kind of related to another commentary mentioning how it's much better to ensure they use your accounting software rather then theirs if working for SME's
Like are you guys out here using quickbooks, sage, xerox? If it matters I am in Canada currently
QuickBooks, zoho, xero, wave. I would suggest talking to some small business owners to find out what they are using. This will give you an idea what to focus in. In the US most use QuickBooks Online.
I’m fucking hoping and dreaming. Currently $260k a year from making $250k a year. Give it 10 years and I expect to be clearing $250k a year to $400k a year.
I know most of you are talking about flat fee models but those of you that do charge hourly, what is your rate? And what is your background and experience?
I do fractional CFO work for 5 clients that averages $19K per month. The rest of the money comes from doing taxes and special projects (auditing projects/ settling tax issues for clients, etc.) I also charge for speaking engagements.
Lots of small accounting firms that can’t handle having staff on payroll so they are eager to contract work. Freelancing could work out for interested folks.
I’m focusing on FP&A and bookkeeping and leaving the taxes to others. My minimum is $1,000/month. I specialize in the trades and construction and dabble in nonprofits. This is my new structure that I have been working on in the last six months. Since I made the shift it has been amazing.
Took over a book of HNW folks and lots of trusts & a couple large corporate returns. Also in the process of turning many of these into asset management clients, multi family office style.
Any advice for someone looking to start their own shop? I'm confident I can get clients especially family and friends. Most would be orphan 1040s but some would have business returns associated with them. I think I would need to offer bookkeeping service along with tax prep.
The best model I’ve seen is you charge $700/month to small businesses to do their bookkeeping and tax returns. In the end you charged $8400 for the year, and even though it takes a while to get the bookkeeping right, once it’s tight you can really streamline your time on everything. Tax returns get done fast, bookkkeeping is pretty straightforward and delegatable to a $50/hr bookkeeper. Do not take on 1040s. There is a reason there are a ton of orphans, it’s a terrible business. We have implemented parts of this model, I do over $250k
This is me. Leaving the traditional market for the controllership model. Fees from 1-10k per month depending.
What do you mean ?
Fractional?
Can you give more detail?
This is pretty much what I do, but in a very specific niche market. I currently work for a firm but I will be taking it over in the next 5 year. Controller level work, plus bookkeeping, plus ad hawk CFO services all in one package is a very easy thing to sell people on.
Ad hawk tuah work
Ha! Leaving it.
Hahaha
Definitely getting the client with that attitude
Your attitude determines your altitude my guy
😂😂😂😂
😂😂😂
$8400 doesn’t seem nearly enough for year round bookkeeping/payroll and tax prep unless we are talking about mom and pop businesses.
Very much dependent on size of business. We charge from $500/month to $10k/month, mostly based on transaction volume.
Do I work for you? If so, see you at work. I don’t, but goddamn you’ve described our exact model.
Yeah it’s not a model that’s original to me. And we don’t do it exactly either, so I doubt you work at my firm haha, but we might go to the same professional conference (Pasba)
Transaction volume isn't even relevant anymore these days, it's more about the amount of non standard transactions and the different amount of transactions. The client who has the most bank transactions of all takes me like 10 minutes a month. It's all automatically processed.
Depends on the business and number of associated returns and complexity. Mine range from $500-2,500/mth. I budget it at 250/hr.
That depends on how much you automate, 8k is a fair amount of money for which you can do an administration, an annual report and tax reports for a lot of businesses. Even if their revenue goes into the millions. Because I am in NL I have to deal with the international VAT and for those clients we just set them up with a good invoicing program and save ourselves hours. But idk how good the American accounting software is, the CRM software is generally pretty terrible.
There are a lot of mom and pop places out there…
Yes, but I find they are not as profitable. My 15-20k billable HNW clients are far less time than the billable equivalent of mom and pop stores. The most profitable method is value billing.
I think its saying by having a set and low rate that nets almost 10000 a year if you can find 26 similiar clients you can easily get to 250k and outsource for a fraction of the cost. The business model is volume and velocity not magnitude of client -- as i am sure it is harder to land 10,000 per month clientele than it is 700 per month clientele
That being said, it’s a LOT easier to find 5 $300/mo clients than 1 $1,250/mo client. More admin and involved, but sometimes you need to fill the gaps and pad the book of business.
It checks out. Small business with 300 transactions monthly. Charge 1500 for business return. 350/mo bookkeeping. 150 for payroll. 100 for sales tax filings. He may be off by a few thousand but if you know the client front and back that bookkeeping will take barely a whole day after all transactions are in per month.
what do you offer in a bookkeeping package like that? books and payroll plus yearly tax return?
I’ve always wondered about doing this….how does this work? Do you work out of their ERP? Do you bring them into yours? Do you integrate with any kind of sales system? The small business owners I work with are mostly paper based and I not super computer/tech literate so I can’t imagine wrangling the data as an outsider to get accurate revenues and expenses. Much less depreciation/inventory/fixed assets
They have to come to your systems. Any exception drives my pricing up a ton. And I am very careful about which clients to take. Would not take any clients who are not tech literate
You can also make a lot of money by charging that 700 a month and then automating the hell out of it. These days you can get so far with automatic bank imports, automatic invoice processing etc. Setting your clients up with a good invoicing program will save you a ton of time. Especially if you (like me) are in Europe and have to deal with national and international VAT. Generally some of the worst things on the automation front are cash, creditcards and stock.
You are paying your bookkeepers $50/h ??
Is that to little or to much? $50/hr with 1500 billable hours is $75k/year, which is a pretty good salary in most places. And if you keep them busy, you can bill $200k for each one.
The same people saying that’s too much are the same people I’m going to see complaining about not getting paid enough in the profession. $50/hr might seem like a lot for a bookkeeper but you get what you pay for. If you’re paying that much then you’ll have every bookkeeper in the city lined up to work for you since countless others pay $20-30/hr. In the end, you get your choice on a very skilled bookkeeper who will give you good work, you still get a very high margin on bookkeeping work, and because you paid more for an experienced bookkeeper and don’t have to micromanage an incompetent one, you have less things to worry about as a business owner. Win win for everyone.
Yeah - an unskilled and cheap bookkeeper just makes things worse. Like much worse.
This is what I’m also wondering. It’s not the 50/hr though, it’s the “$700/month” part mentioned above. How many hours of bookkeeping is required if you’re charging $700/month for that particular client? 1 hour, 2 hours, 7 hours? I’m curious, because I’ve seen the model before, but not sure how to price it accordingly.
Love the idea of only doing business returns. They are typically quick and easy, with a good margin. The 1040s not so much.
how small are small businesses? as a CFO with extra time on my hands i've thought about offering my bookkeeping services but also feel like i would be lacking the intimate feel with the business if i am only doing it part time.
That is the challenge. Can you systematize such that you don’t have to in the business every day, while still providing real value and real reporting to them.
I do this individually as a side gig on top of my salary job but without the tax returns. Flat fee bookkeeping is bread and butter and very easy. Works out to over $200 an hour on average. Great side income but I would have to charge more if I had overhead and a firm.
If you don't mind me asking how do you onboard clients/what would be the best way for me to learn how to do something similar? I am a CPA but would love to start my own Controllership type businesss.
How small are we talking here?
$400k-$800k revenue
For a similar Revenue client in the uk, we wouldn't be able to charge such a fee.
too high or too low?
Too high.
Finally a thread that actually shares some trade knowledge instead of just the same 3 posts over and over
*Excuse me, some of us enjoy hearing about everyone's pizza parties.*
will AI be taking our pizza?
Best community I've been part of is Ryan Lazanis's (spelling ?) Future Firm.
Just started my firm and I'm thinking about joining. How is it? What makes it worth it?
I pretty much built (and sold) my firm on advice from the book "Built to Sell" and the Future Firm group. First of all you receive playbooks on all aspects of running a modern accounting firm. The forums are super helpful. Also he does a monthly call where you can get your questions answered.
Forreal! Need more of these. Just got my CPA & eventually wanna start my own solo(ish) firm down the line
working on getting mine as well. Slowly researching possibilities for opportunities after passing 4/4
good luck!
I focus on business returns and try not to do many orphan 1040’s.
A what
#An orphan 1040
A what??
#An orphan 1040! 📣
A what???
#AN ORPHAN 1040‼️
WORLD STAR HIP HOP PRESENTS AN ORPHAN 1040‼️
does the show start at 10.40?
Oh Lordy its an orphan 1040 No parent like a test on Murray
When a kid's parents' dies or killed by yourself, the IRS still expects that Kid to file their taxes. Not the industry you want to get into.
Oh damn. That sucks :( I went through that just didn’t know what it was called
Orphan 1040 means it's just the 1040. Like you would do a business and the owners 1040, but you don't do many 1040 only.
Wait, question.. if the parents aren’t required to file, do the kids still need to file??
Yes! And they cannot claim the coffin under depreciation rules or the body
😹 rent a casket is the way to go. Caskets can be 6K, rent one for $800, and they still put you in a nice sealed container. They would, essentially file a $0 return?? My grandma passed, retired, no annuity, so we didn’t file one for her. I’m wondering if that was a mistake. 👁️
CuratorOfYourDreams nailed it. But to explain, they’re an individual tax return with no association. No business/schedule c/extra work besides the return itself. These clients can be fired and replaced by the dozen. Usually you bump their fees just to make it worth keeping them. There will never be business growth, they don’t refer “good” clients, they’re a headache, and they only come around in the busiest time of year.
These types of clients are only good if they have some sort of complexity. I’ve seen 20k 1040s that were excellent clients because they were very complex high net worth with 60+ K-1 investments that needed year round planning.
I don't make close to 250k but I can tell you there is a pile of easy money in orphan 1040s.
I don’t make 250k yet, hopefully on the next couple years I will be. I do about 500 of these types of returns at my firm each season. I can do a return that I bill $300 for in about thirty minutes. 2 of these per hour is around $600/hour and people pay on the spot when I pick them up. People overlook these type of returns but they provide a nice chuck of revenue for easy/low risk work, and they come back every year.
How did you get clients?
Kill their parents maybe
A new meaning to The Accountant
Dr Bank Dr Bullet expenses Dr Cleaning expenses Cr revenue
That’s a doctor of niche specialties
New Batman Villain - The Tax Collector
Right now clients are easy to come by, as the uproar with the government and all the tax law changes seems to make people more apprehensive to do their own returns. For the most part Facebook and a website gets enough clients, but that will likely change moving forward. Right now there’s a lot of accountants retiring so it’s been much easier the last few years to get clients.
Very true
But relying on that could be bad no? Because they could easy leave and switch to like turbo tax or some other do it yourself solution
They can leave, and sometimes people do. Typically you never lose more clients than you gain though. If fifteen leave, fifteen new clients usually come in that year to take their place.
*15 come in at a higher price to replace the 15 that left. Increase prices on new clients annually- keep the prices generally the same for established clients.
Unless they're smart enough to ask IRS for the previous years report to use as a template, they will fuck up and you get more billable work.
Do you not send them the return before you file it? The last time I had someone do my taxes, they had me review it before submission.
So to be clear you are saying you make 150K in only 250 hours or about 6 weeks of work assuming 40 hour work week.
I bring in that revenue. I have a building/office and three employees so all that doesn’t go right into my pocket. It sets in the business account and dwindles down through the year in the form of wages and other costs. Another thing i should make clear is that I can prepare the returns in that 250ish hours, but there’s more time involved in having the returns reviewed by another accountant, and assembled and gotten to the clients by a clerical/administrative employee, so it’s not a straight 150k in a small amount of time.
There can’t be that many orphans filing taxes
You only need one client - Batman
I find widow 1040s to be the easiest.
Would you willing to share your COL demographic and base fee for a basic1040?
75k-300k. $395 for base 1040.
Thanks for the response. We are LCOL and our base fee is $600. We haven't seen value from basic personal returns in the past.
$600 for less than an hour of work, I see the value.
I focus on the clients I like. I’m Lcol. All kinds of returns. My business returns r mainly service businesses.
yeah getting 10-20 loyal business clients in an LCOL area that would pay more than $500 a month is quite a challenge. I do about 500 orphan returns then a couple book keeping clients. Hopefully i can reorganize and rescale
Don't charge less than $1, 200 per tax return. If you are doing an S Corp and it's owner 2k is not too much. This allows you to focus on high paying clients rather than working on a million $200 returns.
This
Wtf is an orphan 140
It means a stand alone 1040 with no business returns. Best clients for me personally are when you prepare one or more business returns and their 1040.
So a return for a non-corp with whom you have no regular relationship? Anyone know what the Canadian equivalent would be?
From the sounds of it, a basic T1 with no T2125 or related corporate return.
When a mommy and a daddy both die and their orphan child has income that needs to be reported. It is what made Bruce Wayne want to become Batman.
The real question is…. How do you get started? How did you get your first second and third client? It’s overwhelming to think about how to start.
For services targeted at small businesses like bookkeeping or tax preparation: have small business owners in your network (not viable for most of us) or be an excellent salesman who is capable of cold calling small businesses and delivering a convincing sales pitch in a way that doesn't sound like you're trying to pull off a confidence trick or some other financial scam.
I imagine a lot of of people start in public, either building relationships and taking them with you, or you do work on the side until it gets to a point where you go on your own.
being friends with people who are wealthy or own businesses.. or have parents that are wealthy/own businesses I knew a guy whos dad was a solo CPA practice and 90% of his clients were from his religious community.. he was clearing like 200-300k off his practice and also had a regular six figure 9-5 job on top of that back in 2017
First clients was a referral. Clients 2 - 150 saw me giving interviews about filing taxes and they booked appointments. Since then- new clients either know who I am from those interviews or are referrals.
Minimum fee for return is $500, weeds out the riff raff. Focus on businesses (plenty of small businesses that are still sole proprietor) which most are well above the $750 mark. Charge $300/hr. Profit
Outsourced CFO and controllership for 3 clients. Took on two bookkeeping clients because it's relatively easy work, but it comes with the requirement to also do the business returns. Ended up taking one a few other business returns and the personal returns of the owners.
If you are good at it and help build a clients business it can get tricky to level up your business. started this way and ended up with one client 225k, next 47k and the third at 36k. Not wanting to miss out on the client of a lifetime these three end up so much special work I could not delegate and crowded out the rest of my business at the time…
I have one large specialized client and 3 cfo/whole package clients. Gross is probably $250k this year. Plan for a few more cfo clients next year ($2k/mo+)
Do you happen to have a list of services you provide with the CFO clients that you wouldn’t mind sharing?
It varies honestly. I can offer everything from basic bookkeeping and tax prep to payroll to full advisory with HR etc. I tell entrepreneurs I do all the parts of their business they don’t want to do.
How do you advertise your services? I currently have a firm but am trying to shift my services to this type of work.
It’s been all referrals to date but I’m working with an seo and ppc guy to turbocharge growth.
Maybe I misread but are you grossing $250k off 4 clients?
Yes. One client is advisory reselling my services that grosses about $180-$190k. Another is $45-$50k. One is about $20k. The other was $10k last year but likely will double this year.
Damn. Here I am preparing 250+ returns for $300-340k.
Still not bad. What’s your sg&a/other costs on that?
Cash flow to me is a bit over $250k. This includes salary, business loan P&I payments and some personal distributions. The ideal situation is to keep the returns where they’re at and start adding in recurring work (bookkeeping, advisory maybe cfo) or just buy a bookkeeping book of business and offer tax services to those clients as well. Then get rid of all the returns that yield less than 3-400 dollars.
Good info. Thanks
What did you do before a fractional CFO that got you the experience to do that type of work?
I did some private equity gigs/other work and really got my start when my wife started a biz that needs very good records and used that to leverage new clients.
My buddy who is on track for 350k does some specialized audits and orphan 1040s.
Do you know what software they use?
ProSeries
I do 8 returns on the side. Pro series pay per return is great
IRS representation work?
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I live in semi-rural area and work my ass off.
I’m rural too any difference you see between rural america and others on here?
There is a huge need for 1040 preparers. I do around 1000 returns a year, a mix of small corporations, sub-s, partnerships and 1040s. Most of the 1040s have either Scedule C, F and/or E. I also offer bookkeeping and payroll services, but that is only about 20% of my annual revenue.
How long does each return take and how much do you charge?
A simple 1040 that I can complete in less than 10 minutes would be a minimum of 150. My most complicated 1120s is 4k takes most of a day or two if I have everything without questions. So, I actually don't complain about 1040s when I am making around 1000 an hour. Lol
Lots of good answers here. Hoping to one day have my own small tax firm.
Idk what tf an orphan 1040 is I guess cause I'm Canadian I'm sort of cheating because like half my income comes from my day job and the other from my firm. I think the easiest sell imo is an all in one package, I'll do your monthly bookkeeping, the financial statement compilation, and the tax return. It feels a lot more reasonable to charge 500-2k a month, depending on number of transactions/complexity, than to hand them one huge bill after filing their taxes. I still do more year-end with no bookkeeping than with, but I started out with a couple of those all in one clients and it grew from there I do personal taxes as well, I charge 500 minimum and they usually take under an hour to do and it's really mindless. Sometimes I'll have a client with a really complicated situation, and I'll contract out the work to a local firm I used to work for
1040 is US equivalent to T1
I don’t think the 1040 part is what anyone is confused about 😂 Tf is the orphan part ??? I’ve never heard it used til now
A solo 1040 by itself with no other returns is considered an orphan 1040.
Just a solo T1 lol
Solo 1040 as others have said. The reason a lot of people try to avoid them is because they are the lowest revenue, smallest margin, inefficient (you still have to onboard clients and figure out everything for the first time) and you have to do VOLUME to make any real money.
I see, thanks for the explanation
People are paying 500 dollars for a personal tax return??
Yep, that's the lowest I charge, I've done 3k+ ones before, those usually involve a significant amount of planning, or they're a sole proprietor
That's awesome! I do personal returns on the side and find that the average client (e.g., T4A and T5s) would baulk at anything over $100.
We talking self employment income or t2's potential. These ain't that easy t4's from regular employment or t4a's for grandma collectin her pension though.
When it comes to bookkeeping do you also do payroll, ap, and ar?
Yep, they give me their bank statements and their invoices for AP and AR but I've never contacted a vendor or anything on behalf of clients Payroll is extra but I'll do that as well
For AP do you record the liability AND issue payment? Or do the business owners issue and sign checks from their office?
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Lmao you guys are funny
focus on business returns and try not to do many
What’s needed to start something like this? Sounds really interesting to do this on the side in a few years when I get more experience
what accounting software do you use?
I do fractional CFO services for one large client that I charge a monthly flat fee engagement. Then I prepare about 225 tax returns (S-Corps, Partnerships and 1040s). During busy season I probably work 50-55 hours per week, and the rest of the year 25-32 hours.
Anyone looking for an accountant to help out? Looking. 14yrs experience with consulting, M&A, integrations, cleanups. Remote.
Yall talking about doing like 800 tax returns, to make what could be made doing like 3 medium-sized audits.
lol no
Never worked in audit, how hard is it to land those clients and how long do they take?
You have to have a peer reviewed firm to do assurance work.
You can't just go out and hang your shingle as an auditor though. There is a reason why pretty much every small 1 man shop is tax, bookkeeping and "advisory" with no audit practice.
That's due to quality review standards. It's technically possible with one and to work in coordination with another shop to trade QC. But ya, two is better.
Following
"import and export" ,
I'm solo but I wish I made $250k. I make about $130k but I'm doing all the work myself. If I hired help and tapped into my network, I could do $250k easily. I've just been dragging my feet. My industry is very niche.
If you are in a niche industry, I would highly encourage that you raise your prices. You have tons of value from knowing what problems the client has before they even talk to you.
I focus on startup/small business/professional service accounting and bookkeeping, and fractional CFO work. Trying to pull away from hourly ad hoc services, and away from taxes starting next year. I'm currently trying to take the next step and grow further - recently hired an employee finally but struggling to generate leads at this point and have somewhat plateaued.
Does anyone have suggestions on software programs to use to offer these bookkeeping and advisory services? This is kind of related to another commentary mentioning how it's much better to ensure they use your accounting software rather then theirs if working for SME's Like are you guys out here using quickbooks, sage, xerox? If it matters I am in Canada currently
i second this
QuickBooks, zoho, xero, wave. I would suggest talking to some small business owners to find out what they are using. This will give you an idea what to focus in. In the US most use QuickBooks Online.
I’m fucking hoping and dreaming. Currently $260k a year from making $250k a year. Give it 10 years and I expect to be clearing $250k a year to $400k a year.
What do you do
It sounds like he currently loses 10k/year, so I'm guessing "student". Or perhaps he is a WSB degenerate.
Looks to be a an issue here where people are confusing gross and net…..
Which is an odd thing for accountants to confuse.
I thought I was the only one seeing that.
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Almost all tax work focused on business returns and their owners. And more tax planning to have year-round work.
No tax. All CFO/Controller stuff, with a bit of systems integration thrown in.
I know most of you are talking about flat fee models but those of you that do charge hourly, what is your rate? And what is your background and experience?
Audit and tax
What are yall netting?
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I do fractional CFO work for 5 clients that averages $19K per month. The rest of the money comes from doing taxes and special projects (auditing projects/ settling tax issues for clients, etc.) I also charge for speaking engagements. Lots of small accounting firms that can’t handle having staff on payroll so they are eager to contract work. Freelancing could work out for interested folks.
I’m focusing on FP&A and bookkeeping and leaving the taxes to others. My minimum is $1,000/month. I specialize in the trades and construction and dabble in nonprofits. This is my new structure that I have been working on in the last six months. Since I made the shift it has been amazing.
Following
Took over a book of HNW folks and lots of trusts & a couple large corporate returns. Also in the process of turning many of these into asset management clients, multi family office style.
Any advice for someone looking to start their own shop? I'm confident I can get clients especially family and friends. Most would be orphan 1040s but some would have business returns associated with them. I think I would need to offer bookkeeping service along with tax prep.
We offer only bookkeeping for a very niche market using QBO. It has allowed us to work remotely since 2010 and have a flexible schedule.