Am I the only one that feels this way?

[ILLMAS]

I am working on my 2012 tax return and every year I take less home, not counting working more than 40hrs a week, weekends, deadlines..... Sometimes I think I can make more money working at Target and not go through all this aggravation

[Guest Taxed]

Have to tried to do an analysis of your book of business?

Are your rates way too low compared to competition?

Are you charging enough from PITA clients who hog up most of your time and resources?

Finally are you growing your business by adding more profitable clients than your lose. That is a key factor.

I was losing money every year when I had walk in clients and adding to my fixed expenses (receptionist 10 hrs a day) and the quality of the walk in sucked. Got rid of that aspect and immediately saw a difference.

[mcb39]

I always had a steady increase until this year. (2013) This year I backslid some. Part of the reason is all of the divorces and clients who have passed away or no longer need to file. Also had a few clients marry each other; so two became one. Otherwise, I cannot account for it as I had the usual number of new clients. I am only comparing the income and not the expenses.

[Jack from Ohio]

Jumped my personal practice from 215 clients to 275. Looking for the same kind of increase this coming season.

[michaelmars]

Jumped my personal practice from 215 clients to 275. Looking for the same kind of increase this coming season.

that's a pretty impressive increase and yet you still have all the time to post here. Good time management!

[Guest Taxed]

Jumped my personal practice from 215 clients to 275. Looking for the same kind of increase this coming season.

that's a pretty impressive increase and yet you still have all the time to post here. Good time management!

Jack from Ohio talks about working at the "firm" that does over 3000 returns. As an employee of a tax prep firm how can you have your own practice with 275 clients that is a direct competition to his employer?

When I worked at HRB many years back i had to sign a non compete agreement and could not have my tax prep side business out of my home. A friend of mine from there later became the manager of a Liberty shop and same deal there. She was trying to recruit me when I just started and was struggling. I did not want to give up my own practice.

Have things changed that much in recent years.

[michaelmars]

Jack from Ohio talks about working at the "firm" that does over 3000 returns. As an employee of a tax prep firm how can you have your own practice with 275 clients that is a direct competition to his employer?

When I worked at HRB many years back i had to sign a non compete agreement and could not have my tax prep side business out of my home. A friend of mine from there later became the manager of a Liberty shop and same deal there. She was trying to recruit me when I just started and was struggling. I did not want to give up my own practice.

Have things changed that much in recent years.

THAT because you were working for a franchise....Most cpa firms encourage their people to develop their own clients, its great training for the staff in handling and talking to clients and when partnership talk comes up, its great for the staff to have some clients to bring in as part of their buy-in. We give % of fees that we collect from any client brought in by staff but prefer if they develop their own side practice. I personally will help them if the client is beyond them or if the return becomes too complicated for their software.

My first boss not only gave me a client that needed weekly services and he didn't want to get involved with and during a review-I negotiated 3 part days a month off to handle personal clients.

[ILLMAS]

Have to tried to do an analysis of your book of business?

Are your rates way too low compared to competition?

Are you charging enough from PITA clients who hog up most of your time and resources?

Finally are you growing your business by adding more profitable clients than your lose. That is a key factor.

I was losing money every year when I had walk in clients and adding to my fixed expenses (receptionist 10 hrs a day) and the quality of the walk in sucked. Got rid of that aspect and immediately saw a difference.

I admit my complaining is my own fault, I never say no to a client even dough I am super busy and I am too easy when it comes getting paid on time. I let my client troubles become mine and I need to stop this.

MAS

[Richcpaman]

Interesting topic.

I would LIKE any employees of mine to develop a practice of thier own. I would require those clients to be handled out of my office. I want them to handle thier own clients, but to keep them in-house so that we know what we are responsible for. And yes, I would pay them a % for "thier" clientele.

As to the OP thoughts about making less each tax season....

What is the plan? Do you plan for your work during tax season? For after tax season to Oct 15th? Then from Oct 15th to Jan 15th?

I do. I start with the prior years work, and which clients, subtract those who left, or had a special sitch (house or business sale, etc), and try to add any new things that I feel my clients may need. Follow ups on something from tax season, maybe tax law changed that affects a number of clients and do extra year end analysis's...

That way, I can see the holes, and try to move work/add work in the time periods that are light. Also, review the operating expenses to reduce/adjust them.

My office staff is down to two days a week right now.

Rich

[Guest Taxed]

Sometimes for your own sanity you have to say no. When I first started i too would say yes to anyone who walked in the door. I needed the money to cover expenses each week. Then my mentor after that horrible tax season went over my books to figure out what I was doing wrong. Bingo, I was spending too much time on unproductive and problem situations while ignoring the value of time. Like you I too made other peoples problems my problem and that was taking a toll on my attitude. Once I got away from walk in customers, most of my problems seem to work out itself.

I will not do a new tax return unless I am paid in full for any prior year's balance. Though i have made some exceptions for certain business clients who made a substantial payment to clear up outstanding dues and try to catch up.

[Guest Taxed]

>>> I would require those clients to be handled out of my office. I want them to handle their own clients, but to keep them in-house so that we know what we are responsible for.

Rich are you concerned about any liability issues for these taxpayers?

Does the taxpayer walk away thinking they are dealing with your CPA firm or are they clear about that.

Is this type of business practice unique to CPA firms. I don't recall law firms or other professionals allowing their employees to directly compete with the employer.

[Lion EA]

Years ago when I was with Block, they allowed us to prepare "grandfathered" clients as well as the free friends & family, but required the prep to be on their proprietary TPS software. They also offered me bookkeeping-type clients to do from home. Eventually, national HRB advertised that we provided full business services, but locally we didn't do anything other than tax prep with few exceptions, so the referrals continued. Before I left, for the newer hires only, there was a cap on free returns. Don't know their regulations now.

[Richcpaman]

>>> I would require those clients to be handled out of my office. I want them to handle their own clients, but to keep them in-house so that we know what we are responsible for.

Rich are you concerned about any liability issues for these taxpayers?

Does the taxpayer walk away thinking they are dealing with your CPA firm or are they clear about that.

Is this type of business practice unique to CPA firms. I don't recall law firms or other professionals allowing their employees to directly compete with the employer.

That is my point. I don't want my employees perfoming work "under the shade tree" and those clients assuming I am liable if something goes wrong.

*All* the clients are the firms clients, just some of them are *the employee's* clients. And if that employee left, they could take those clients with them...

That is how I have it set up. But I have no employee's with clients at the moment.

Rich

[Guest Taxed]

So essentially to the taxpayer it is seamless. Your firm bills them and their favorite tax preparer (your employee) prepares them. And as you said there is some revenue sharing.

I think that is prudent than someone running a separate business "under the shade tree" where you have no control.

[mcb39]

When I worked for an independent accounting firm; I had already established my own small practice. She knew it and that is why she hired me. I worked for her until my own practice got too big for me to handle both. We remain friends to this day. She has been retired now for a couple of years.

Nobody wants a return that they sign to be prepared incorrectly., which is what happened to her in the final years of being in business.

[Jack from Ohio]

Jack from Ohio talks about working at the "firm" that does over 3000 returns. As an employee of a tax prep firm how can you have your own practice with 275 clients that is a direct competition to his employer?

When I worked at HRB many years back i had to sign a non compete agreement and could not have my tax prep side business out of my home. A friend of mine from there later became the manager of a Liberty shop and same deal there. She was trying to recruit me when I just started and was struggling. I did not want to give up my own practice.

Have things changed that much in recent years.

I work for an employer that has a totally working brain, is wonderful to work for, and between us we have worked out any "direct competition" issues that may arise. I have worked at the form for 10 tax seasons with no problems. I guess it is about who you choose to be your employer.

[Guest Taxed]

Glad to hear that your employer has a totally working brain?

[ILLMAS]

Taxed, to answer your prior question, no I have not done a business analysis nor the other things yet, here is my story. My former employer, a CPA firm did do the analysis for the tax and small business department (The 80/20 rule) and found out this department was not profitable, so back in late 2007 I was ready to move on and change career, but before leaving a was given an offer. They offered me the tax and small business clients at no charge to me, I simply had to open my own company, find an office or rent an office from them and I could keep any client that wished to continued with me, so I am an a one-man operation since 2008, I have to do everything myself. But I have gotten to point where I feel I am at the 80/20 myself

[Richcpaman]

MAS:

Taxed, to answer your prior question, no I have not done a business analysis nor the other things yet, here is my story. My former employer, a CPA firm did do the analysis for the tax and small business department (The 80/20 rule) and found out this department was not profitable, so back in late 2007 I was ready to move on and change career, but before leaving a was given an offer. They offered me the tax and small business clients at no charge to me, I simply had to open my own company, find an office or rent an office from them and I could keep any client that wished to continued with me, so I am an a one-man operation since 2008, I have to do everything myself. But I have gotten to point where I feel I am at the 80/20 myself

MAS:

Then what is your business mix? How much revenue from different sectors of your practice: How much for personal tax returns, Corporate Tax Returns, how much for Write-up work, payroll, etc? Try to break it down to 5 or 6 major pieces, with misc being the remainder. And compare to what did you start with in 2008 in those categories?

That would give you an better idea of what may make you more money, or has the most opportunity.

Then, I would analyze each of those revenue area's. And break it down by client. If you only have 10 clients, then that pretty simple. But if you have 300, its a little more work, but should still be done. Compare what you are billing to your average, or what the averages from PPC are for that type of service in your geographical part of the country. Assign the amount of time you DID work on some of those clients, and compare some of the ones that seemed to have major writedowns to what you really think of them... And then resolve what increase you are going to assess against them next year.

What are you using to bill your clients? Does it detail what you have done, by client, each year?

Rich

[Guest Taxed]

MAS I hate to say it but for your own sanity do that analysis on your on book of business. I can assure having done that myself you will learn a lot about your own business that you wished you had known before. I am telling you it is amazing once you put the emotions to the side and look at things objectively, your decisions change. You may come to the decision that you need some help to either grow the business or sustain it at a level that makes business sense for your situation.

I resisted getting rid of my walk in until that analysis because it was easy business but I was getting myself in a deeper hole.

Good luck. Hope you have a better season in 2014.

[Mr. Pencil]

I finally rolled my independent practice into a larger firm. My fees were still barely half of the rest of the office, but one client complained about the price increase. I replied:

That’s a real good question! ,One of the reasons I brought my clients into XX’s office is that my own low rates were no longer sustainable. Although my office overhead was minimal, the cost of software and continuing professional education can not support a small practice any more. The Enron scandal, mortgage collapse, and other accounting industry problems over the last decade led to new standards for handling financial records and other IRS compliance issues. These are much better managed with supervision and a clerical staff, but that has to be paid for.

Although your income numbers aren’t high, we must charge according to the complexity of the return. Your family has several tax matters that increase the cost of tax preparation. The most obvious is accounting for a small business. (About half your fee is deductible for that purpose.) You also have a partnership with a passive activity loss carryover. There was a technical sale of less than one share of XXX in a merger, but that generates a three-page form on your tax return. So that’s what’s going on.

XX has allowed me to raise rates slowly. Standard pricing in this office for work listed on your invoice would be $xxx, although I would expect the actual price to be $xx dollars lower because you provide complete records and some of your items are relatively simple. We haven’t done any systematic market research recently, so I can’t say if that is high or low. It’s just what it costs for this office. You should take your invoice or the return to a few other accountants for comparison.

[Richcpaman]

MAS:

I may be over analyzing my own business. I spend alot of time looking at things like that, and not enough doing the actual work sometimes.

But a failure to plan, is a plan to fail.

And that is why you posted this thread. Why is your net income going down? You are probably working harder, and doing more returns, but taking home less cash.

Let me ask you some other questions:

How old are you?

How long have you been doing tax/accounting work?

How much longer do you think you will be doing this?

You mentioned that you were ready to leave this employment area, when your employer offered you the tax and small business practice. So, is some of this becasue you just are not interested any more? And there is nothing wrong with the answer.

Rich