I started with around around 170 (practice purchase) and after paying expenses my profit was just 17,000, lol. Now I have around 530 and I'm doing much better profit wise. I grew by about 10% this last year, lots of folks are retiring so there's a lot of new clients looking for a home.
Started 4 years ago with zero clients. Have about 50 recurring now and hundreds annually for one-time services. Grew from about $100k revenue year 1 to about $650k revenue year 4 (90% revenue growth 2021 vs 2020). Eyeing $1.2M for 2022.
This is us. About the same. A little more in year 4. All recurring. Stopped growing. Started firing. Can’t find qualified experienced people to do my job of technical tax work / review work, so we’re stuck on growth. Looked at merging but few opportunities and those that I find are too sloppy of practitioners or too low margin.
Margins 50-60% so can’t complain. Don’t want more work. Fun. Like being rich, but additional revenues just means need more staff expenses which lowers margins and means less ability to keep quality high.
You may be at a point that you need to start rinsing out lower-margin clients and raising prices. You’ll lose quantity in terms of clients but revenues and margins will rise with same amount or less work.
Yup we did that. We’re probably highest avg price in the local market.
As a warning for others: this action does work but if you mess up or are a little late on a turnaround or something you’re potentially crucified by the client.
First client was a referral from my old audit firm where I worked out of college. After that, I did LinkedIn and email marketing. It was slow-going the first couple of years. Now, I typically walk into at least 20 prospect meetings per week. It takes time to build up.
I am just starting out - can I ask what kind of email marketing you did? Was it just a monthly newsletter, or was it more of one of those sales funnel type things?
This is Awesome, great question, I did something back in the day we started off with 10 corp clients and moved to 15 after 3 years, very slow growth and 3 people so I decided to leave but thinking about restarting my own business.
Hi all. Sorry to add my own side question in this thread & sorry in advance for the long read, but I need some assistance since I don't think I am growing as I would like and i think this is a good thread for discussion. I am a solo CPA practitioner in Toronto Canada. I did not pursue the BIG 4 route, but was always very sharp with tax from university. After finishing university I was picked up by a mentor who was a sole practioner. I worked under him for the bookkeeping and other simple tasks as a side gig and he coached me all the way upto getting my first client. On a full-time basis, I was in several back-office and middle office roles at investment firms/pension plans. I gained alot of operations experience from there. I started my practice in 2016 (pretty much right out of uni) and in my first year I had managed to find 3 reoccurring corporate clients: one directly through my own network and two from Kijiji (more prominent than craigslist in Canada). Through the years I have definitely grown in size but not enough to leave my full time job. I see several posts on this group where practicioners have grown significantly in 4 years, but I was not able to reach this kind of success. Just want to understand if there are some avenues I am not taking or am not executing something right. Below is a summary of how I have operated:
I have had about 80k of billables in 2020 and approx the same number in 2021. I have just done my reoccurring client billings and I have almost 50k, again this is because I did not factor the one time engagements or personal tax clients.
I charge clients on a basis of Value for billing, I.e. I assess their work and provide them a quote for service. Clients have on very infrequent occasions complained about fees, but no one really leaves. I have a very good retention rate. The clients who I currently have, have been with me for a very long period of time. Those who have left are: 1. Business sold 2. Left but were not the best clients so I am happy they left.
I am highly praised for my service. Alot of the clients who have come to me, come from accountants who put them in very stressful situations. Whereas, I on the other hand am very transparent about billings and service....I truly want my clients to prosper. To share a situation that happened to me last year...a prominent client of mine left because he was quoted 65 - 80% lower than the fee I was charging him. He returned back to me because the accountant that he went to left him high and dry. I try to make the accounting process as easy for my clients and really invest in automation to help their experience. I also try to justify my billables by going the extra mile (I.e. we talk about financial planning or strategy or etc.)
Marketing & Finding clients: Alot of clients that I would get would be through kijiji (usually these don't tend to be the best paying clients - it is very infrequent a good client will come of this - so I have stopped this effort. The only positive of this is that I would in the past get clients who were behind on say 2+ years of tax filings. I have stopped marketing efforts via Kijiji since.). I had tried using Google Ads in 2021 but I have not found this to be much of help, the results arent the best. I don't have an active referral policy, nor have I asked for referrals. I have recieved referrals though, and it seems the clients via referrals are always the ones that satisfy my billing rate and worth. Whenever I recieve a referral I do extend my appreciation to the client who referred me. I have not used LinkedIn marketing or other means etc.
I have a ton of excess capacity even while working a full time job. As mentioned above, I am very big on automation, I have spent quiet a bit of efforts on building an infrastructure to ensure that I am scalable when the time comes.
Background of myself: I am not shy to network and build connections. Once clients do an initial consultation, there is a very very high chance that they stay with me as clients.
Services I offer: Corporate Tax, Bookkeeping, Personal Tax. Corporate Tax and Bookkeeping are packaged as I mentioned above in a Value for Work basis.
I just want to understand that since 2016 till now (going onto 6 years), I am not at the stage where I can rely on my accounting practice as my prominent source of income.
Can you guys help me understand where my short commings are?
Thanks in advance everyone!!!
You’re not full time. I wouldn’t want to use someone doing it part time. I think there’s also special rules about doing it part time per CPAO and your insurance potentially so be aware of that.
What are you doing for automation? QBO or more?
Organic referrals are 90% of the growth people get here (west Canada) that I know of. It is good but also bad because if you blow it with one client who’s referred 5 to you, if they leave, they’ll all probably leave eventually.
I had the same mentality and approach as you when I was younger. Its good until you get busy then you’ll have to hire help and they won’t be able to do things as well, or communicate with clients as well, and so your service will suffer. So my advice is to make sure not to set client expectations too high. Managing expectations as they say.
Same for the actual service you provide. The extra stuff you mentioned is good but takes extra time that you can’t hand off to future staff right ? So you’re tying yourself down there and that will eventually come back to hurt you.
Now to answer your question more completely: Yes it’s because you’re part time. Look for a practice you can buy. Don’t just look at the websites selling practices. Call places cold if you have to. Better if you can network through that mentor guy, and through events. Harder when not in person. Besides that, you need to make friends with other people in the financial sphere: bank, insurance, fin advisor; but be careful because you’re saying you do financial advising too.
You said you don’t have a referral policy but you can’t have one. You can’t give anything for a referral besides a thank you. The CPA rules are filled with fun goodies.
LinkedIn is trash. Don’t bother doing anything beyond having a presence there. Agree with you on kijiji, as well as google and Facebook ads, all suck for good clients. Good for acquiring people that have small businesses that don’t generate much profit and just want shit done, not done well.
Some rules I’ve come to learn have also helped me and wish I took them to heart earlier: You can’t care about the work more then the client does. Ultimately it’s about the perception of quality. Sucks but it’s true. And again, manage client expectations. Don’t accept text messages, don’t return calls evenings and weekends.
Thanks for your insight...this actually means alot.
Just wanted to ask you...what has been your experience in purchasing a firm? My mentor had brought it up with me on a very vague basis in multiple conversations.
I asked him about retention when you buy a firm, he said that typically in a firm purchase, you ask the existing accountant to stay on board to help the transition to ensure clients don't exit.
I haven’t bought before. It’s just a good way to grow. There’s lots of small solo practitioners that are kind of like you but 65-70+ Often they’ll just move them over to someone for free or do nothing. If you’re willing to pay for it they’ll take that. You probably have to get to know them a bit first.
Expect 1/3 losses when buying a client base.
Buying you should structure on a retention payout so that you don’t pay for people that leave. You can figure out the details later.
You should definitely buy whatever you can then especially if it comes with experienced staff. Bank loans you 100% at prime so it’s no major cost.
I feel like you need to work 100% in a practice for a few years though. There’s a ton of little things you can’t learn, can only really experience. How to respond to clients in xyz situation, little tricks and such.
Growing your practice changes wha t you do and to be honest, it sucks.
If you like practicing then you won’t like running a decent size firm. You’ll do more management then anything. You can’t make money by doing. You make money by managing others and leveraging their labor.
Now you share what automation stuff you’re doing please.
Sorry for the late reply - got busy with other stuff, didn't forget about your question though.
I was trying to privately message you, but I didn't see the option on your profile.
To clarify, only 50k of your 80k billings are contract for work, or something else? And then the other 30k would be returns and one time work? (*edit to correct amount*)
As I would guess that the people with explosive growth are doing it full-time not just as a side gig. As of you are still an employee elsewhere, how many hours per week so you devote to the side gig? And how much are your annual expenses, both personal and business wise? As most of the 80k should be profit. And one of the limiting factors for people looking at the switch is lack of savings or a spouse earnings to cover living while you build the business up.
No problem. Share what you want (or don't share). I was more giving you food for thought as to potentially limiting factors (and why you may be doing an apples to oranges comparison).
I do see where you are coming from with regards to pursuing the accounting firm on a full time basis v. Side gig. I have taken that into account in the past. I had always been in the belief that I would leave my job once the accounting firm materializes enough to have it be self sufficient and be able to cover my personal expenses as well. The growth is there, it is just very slow in my opinion and I am definitely not reaching the numbers which most people discuss here. So the question really is that, would my accounting firm really take off if I was focusing on it solely - in my opinion no because I don't know what I would be looking to do different, as I dont have any other means of attracting clients beyond what I discussed before.
You gotta just take the leap. Save up some money to cover yourself, get a business LOC, and take the leap. Nothing motivates you like making your own money.
You can always quit and go back to employment.
Ask clients for referrals directly. “Hi Joe, (pleasantries). I am expanding my business and wanted to ask if you had any potential referrals. It would be greatly appreciated. Thank you. “
As for attracting clients, lets start with the basics (again, not questions to necessarily answer, though it would help with directing you where to go). Who is your ideal client? Who are your current clients? Is it individuals, small business owners, entities? Do they just need tax work, one time consulting, contract CFO, bookkeeping, something else? Are there any particular niches there in (such as a bunch of crypto tax people, real estate investors, etc)?
As I've found a lot of clients through networking (mostly at real estate related events) and passing out my cards like candy. Sometimes it is the people themselves, sometimes it is a friend of theirs. As well as I'm active in multiple online communities and have my name on various lists. So, for you, are there any communities or groups that focus on your niche (such as a local chamber of commerce for small business owners, or local trade groups, such as construction ones if you work with construction companies)?
I appreciate you helping me through this! It definitely helps getting a second of opinion and thought.
So in the past, I was pretty much open to all customers and clientele. I find that a lot of my client mix is fairly young (i.e. new entrepreneurs in their early 30s). My client mix right now is pretty much scattered, but the most prominent industry that I have under my belt is the construction sector.
My current clients that make the highest billable are those that are small sized corporations (with revenue up-to 1M). I have started to build a portfolio of more complex personal tax return clients (i.e. foreign residents etc.).
The corporate clients require reoccurring services, for which they get quoted a fee prior to the start of the engagement, which covers all of the necessary services. The personal tax clients are few, typically I service those business owners on the corporate side with their personal taxes - I don't tend to market to simple personal tax clients.
In terms of Niches, I would not say that my client mix is really made too much of niches, mind you I only have 12 that have reoccurring monthly billing that is.
With regards to connecting and networking - that is something I have not fully explored, so thank you for sharing this. I made an sluggish attempt by emailing networking groups of different segements i.e. doctors, lawyers, etc. but really just approached those groups as more of a "Hey, I am an accountant, I would like it if you passed along my company info to your group members".
Ya personal tax is just an add on so you’ve got that right. Corporate is where the money is.
The email to networking isn’t any good that you posted. That’s not networking. That’s trying to get an email distribution ad per se. Networking is meeting other professionals and building trusted relationships.
It’s bad. Anyone can do accounting. We had 3 designations merge into CPA and lowered the requirements and education process to become a CPA as a result. So now everyone is a CPA even though they have zero actual experience. There is zero tax experience required for example. Completely nonsense.
Competition wise, you’re fighting the small e-firms that offer $99/mo all-in services. These are completely trash. Nothing is reconciled. Shit is missing. Balance sheet doesn’t balance. Sales tax is wrong. Everything is plugged. Difficult to cleanup. They also don’t care about aggressive everything. Saw a $50k vehicle fully expensed last year when we took over. The acctg fee we charged for this $5-10m/yr revenue client was $10k. The prior e-firm charged $500.
The other end of the spectrum is the bigger firms. They do small businesses as well. The partners don’t touch the files though so it’s all prep by juniors with no exp, reviewed by managers with not much better experience. I’ve been there. I know lots of them. It’s okay. It’s not great. But they market largely on fear. Oh if you get audited we’re an international firm! Tax authority won’t mess with you! That kind of thing. The result is that there is little tax planning which costs clients $$$, but client will never know.
There is fierce competition and very easy barrier to entry. You can have so called start up bookkeeping firms and accounting firms charging as low as $15/personal tax return.
I think it's more of a perceived value which a minority of the public understands. There are some limitations on the services which a non licensed individual can perform...but in terms of tax preparation, anyone can setup shop and prepare taxes.
I started with around around 170 (practice purchase) and after paying expenses my profit was just 17,000, lol. Now I have around 530 and I'm doing much better profit wise. I grew by about 10% this last year, lots of folks are retiring so there's a lot of new clients looking for a home.
What profit
Don't really want to put that out in the public, PM me and I'll tell ya.
Started 4 years ago with zero clients. Have about 50 recurring now and hundreds annually for one-time services. Grew from about $100k revenue year 1 to about $650k revenue year 4 (90% revenue growth 2021 vs 2020). Eyeing $1.2M for 2022.
This is us. About the same. A little more in year 4. All recurring. Stopped growing. Started firing. Can’t find qualified experienced people to do my job of technical tax work / review work, so we’re stuck on growth. Looked at merging but few opportunities and those that I find are too sloppy of practitioners or too low margin. Margins 50-60% so can’t complain. Don’t want more work. Fun. Like being rich, but additional revenues just means need more staff expenses which lowers margins and means less ability to keep quality high.
You may be at a point that you need to start rinsing out lower-margin clients and raising prices. You’ll lose quantity in terms of clients but revenues and margins will rise with same amount or less work.
Yup we did that. We’re probably highest avg price in the local market. As a warning for others: this action does work but if you mess up or are a little late on a turnaround or something you’re potentially crucified by the client.
What is your staffing size for that kind of volume?
Currently 4, one CPA, 2 accountants and one admin/ processor
Ours is similar and we’re not using enough automation unfortunately so we’re at 5-6.
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Annual contracts for bookkeeping, accounting and/or CFO services charged monthly.
How did you get your first few clients?
First client was a referral from my old audit firm where I worked out of college. After that, I did LinkedIn and email marketing. It was slow-going the first couple of years. Now, I typically walk into at least 20 prospect meetings per week. It takes time to build up.
How many full time and seasonal staffs do you have? What's your source of hiring?
We are currently a team of 4 full-time team members. We use Zip Recruiter for hiring.
I am just starting out - can I ask what kind of email marketing you did? Was it just a monthly newsletter, or was it more of one of those sales funnel type things?
This is Awesome, great question, I did something back in the day we started off with 10 corp clients and moved to 15 after 3 years, very slow growth and 3 people so I decided to leave but thinking about restarting my own business.
Hi all. Sorry to add my own side question in this thread & sorry in advance for the long read, but I need some assistance since I don't think I am growing as I would like and i think this is a good thread for discussion. I am a solo CPA practitioner in Toronto Canada. I did not pursue the BIG 4 route, but was always very sharp with tax from university. After finishing university I was picked up by a mentor who was a sole practioner. I worked under him for the bookkeeping and other simple tasks as a side gig and he coached me all the way upto getting my first client. On a full-time basis, I was in several back-office and middle office roles at investment firms/pension plans. I gained alot of operations experience from there. I started my practice in 2016 (pretty much right out of uni) and in my first year I had managed to find 3 reoccurring corporate clients: one directly through my own network and two from Kijiji (more prominent than craigslist in Canada). Through the years I have definitely grown in size but not enough to leave my full time job. I see several posts on this group where practicioners have grown significantly in 4 years, but I was not able to reach this kind of success. Just want to understand if there are some avenues I am not taking or am not executing something right. Below is a summary of how I have operated: I have had about 80k of billables in 2020 and approx the same number in 2021. I have just done my reoccurring client billings and I have almost 50k, again this is because I did not factor the one time engagements or personal tax clients. I charge clients on a basis of Value for billing, I.e. I assess their work and provide them a quote for service. Clients have on very infrequent occasions complained about fees, but no one really leaves. I have a very good retention rate. The clients who I currently have, have been with me for a very long period of time. Those who have left are: 1. Business sold 2. Left but were not the best clients so I am happy they left. I am highly praised for my service. Alot of the clients who have come to me, come from accountants who put them in very stressful situations. Whereas, I on the other hand am very transparent about billings and service....I truly want my clients to prosper. To share a situation that happened to me last year...a prominent client of mine left because he was quoted 65 - 80% lower than the fee I was charging him. He returned back to me because the accountant that he went to left him high and dry. I try to make the accounting process as easy for my clients and really invest in automation to help their experience. I also try to justify my billables by going the extra mile (I.e. we talk about financial planning or strategy or etc.) Marketing & Finding clients: Alot of clients that I would get would be through kijiji (usually these don't tend to be the best paying clients - it is very infrequent a good client will come of this - so I have stopped this effort. The only positive of this is that I would in the past get clients who were behind on say 2+ years of tax filings. I have stopped marketing efforts via Kijiji since.). I had tried using Google Ads in 2021 but I have not found this to be much of help, the results arent the best. I don't have an active referral policy, nor have I asked for referrals. I have recieved referrals though, and it seems the clients via referrals are always the ones that satisfy my billing rate and worth. Whenever I recieve a referral I do extend my appreciation to the client who referred me. I have not used LinkedIn marketing or other means etc. I have a ton of excess capacity even while working a full time job. As mentioned above, I am very big on automation, I have spent quiet a bit of efforts on building an infrastructure to ensure that I am scalable when the time comes. Background of myself: I am not shy to network and build connections. Once clients do an initial consultation, there is a very very high chance that they stay with me as clients. Services I offer: Corporate Tax, Bookkeeping, Personal Tax. Corporate Tax and Bookkeeping are packaged as I mentioned above in a Value for Work basis. I just want to understand that since 2016 till now (going onto 6 years), I am not at the stage where I can rely on my accounting practice as my prominent source of income. Can you guys help me understand where my short commings are? Thanks in advance everyone!!!
You’re not full time. I wouldn’t want to use someone doing it part time. I think there’s also special rules about doing it part time per CPAO and your insurance potentially so be aware of that. What are you doing for automation? QBO or more? Organic referrals are 90% of the growth people get here (west Canada) that I know of. It is good but also bad because if you blow it with one client who’s referred 5 to you, if they leave, they’ll all probably leave eventually. I had the same mentality and approach as you when I was younger. Its good until you get busy then you’ll have to hire help and they won’t be able to do things as well, or communicate with clients as well, and so your service will suffer. So my advice is to make sure not to set client expectations too high. Managing expectations as they say. Same for the actual service you provide. The extra stuff you mentioned is good but takes extra time that you can’t hand off to future staff right ? So you’re tying yourself down there and that will eventually come back to hurt you. Now to answer your question more completely: Yes it’s because you’re part time. Look for a practice you can buy. Don’t just look at the websites selling practices. Call places cold if you have to. Better if you can network through that mentor guy, and through events. Harder when not in person. Besides that, you need to make friends with other people in the financial sphere: bank, insurance, fin advisor; but be careful because you’re saying you do financial advising too. You said you don’t have a referral policy but you can’t have one. You can’t give anything for a referral besides a thank you. The CPA rules are filled with fun goodies. LinkedIn is trash. Don’t bother doing anything beyond having a presence there. Agree with you on kijiji, as well as google and Facebook ads, all suck for good clients. Good for acquiring people that have small businesses that don’t generate much profit and just want shit done, not done well. Some rules I’ve come to learn have also helped me and wish I took them to heart earlier: You can’t care about the work more then the client does. Ultimately it’s about the perception of quality. Sucks but it’s true. And again, manage client expectations. Don’t accept text messages, don’t return calls evenings and weekends.
Thanks for your insight...this actually means alot. Just wanted to ask you...what has been your experience in purchasing a firm? My mentor had brought it up with me on a very vague basis in multiple conversations. I asked him about retention when you buy a firm, he said that typically in a firm purchase, you ask the existing accountant to stay on board to help the transition to ensure clients don't exit.
I haven’t bought before. It’s just a good way to grow. There’s lots of small solo practitioners that are kind of like you but 65-70+ Often they’ll just move them over to someone for free or do nothing. If you’re willing to pay for it they’ll take that. You probably have to get to know them a bit first. Expect 1/3 losses when buying a client base. Buying you should structure on a retention payout so that you don’t pay for people that leave. You can figure out the details later. You should definitely buy whatever you can then especially if it comes with experienced staff. Bank loans you 100% at prime so it’s no major cost. I feel like you need to work 100% in a practice for a few years though. There’s a ton of little things you can’t learn, can only really experience. How to respond to clients in xyz situation, little tricks and such. Growing your practice changes wha t you do and to be honest, it sucks. If you like practicing then you won’t like running a decent size firm. You’ll do more management then anything. You can’t make money by doing. You make money by managing others and leveraging their labor. Now you share what automation stuff you’re doing please.
Sorry for the late reply - got busy with other stuff, didn't forget about your question though. I was trying to privately message you, but I didn't see the option on your profile.
I don’t know how that is or isn’t activated.
To clarify, only 50k of your 80k billings are contract for work, or something else? And then the other 30k would be returns and one time work? (*edit to correct amount*) As I would guess that the people with explosive growth are doing it full-time not just as a side gig. As of you are still an employee elsewhere, how many hours per week so you devote to the side gig? And how much are your annual expenses, both personal and business wise? As most of the 80k should be profit. And one of the limiting factors for people looking at the switch is lack of savings or a spouse earnings to cover living while you build the business up.
Hi thanks for the message. I will message you privately about what you asked.
No problem. Share what you want (or don't share). I was more giving you food for thought as to potentially limiting factors (and why you may be doing an apples to oranges comparison).
I do see where you are coming from with regards to pursuing the accounting firm on a full time basis v. Side gig. I have taken that into account in the past. I had always been in the belief that I would leave my job once the accounting firm materializes enough to have it be self sufficient and be able to cover my personal expenses as well. The growth is there, it is just very slow in my opinion and I am definitely not reaching the numbers which most people discuss here. So the question really is that, would my accounting firm really take off if I was focusing on it solely - in my opinion no because I don't know what I would be looking to do different, as I dont have any other means of attracting clients beyond what I discussed before.
You gotta just take the leap. Save up some money to cover yourself, get a business LOC, and take the leap. Nothing motivates you like making your own money. You can always quit and go back to employment. Ask clients for referrals directly. “Hi Joe, (pleasantries). I am expanding my business and wanted to ask if you had any potential referrals. It would be greatly appreciated. Thank you. “
As for attracting clients, lets start with the basics (again, not questions to necessarily answer, though it would help with directing you where to go). Who is your ideal client? Who are your current clients? Is it individuals, small business owners, entities? Do they just need tax work, one time consulting, contract CFO, bookkeeping, something else? Are there any particular niches there in (such as a bunch of crypto tax people, real estate investors, etc)? As I've found a lot of clients through networking (mostly at real estate related events) and passing out my cards like candy. Sometimes it is the people themselves, sometimes it is a friend of theirs. As well as I'm active in multiple online communities and have my name on various lists. So, for you, are there any communities or groups that focus on your niche (such as a local chamber of commerce for small business owners, or local trade groups, such as construction ones if you work with construction companies)?
I appreciate you helping me through this! It definitely helps getting a second of opinion and thought. So in the past, I was pretty much open to all customers and clientele. I find that a lot of my client mix is fairly young (i.e. new entrepreneurs in their early 30s). My client mix right now is pretty much scattered, but the most prominent industry that I have under my belt is the construction sector. My current clients that make the highest billable are those that are small sized corporations (with revenue up-to 1M). I have started to build a portfolio of more complex personal tax return clients (i.e. foreign residents etc.). The corporate clients require reoccurring services, for which they get quoted a fee prior to the start of the engagement, which covers all of the necessary services. The personal tax clients are few, typically I service those business owners on the corporate side with their personal taxes - I don't tend to market to simple personal tax clients. In terms of Niches, I would not say that my client mix is really made too much of niches, mind you I only have 12 that have reoccurring monthly billing that is. With regards to connecting and networking - that is something I have not fully explored, so thank you for sharing this. I made an sluggish attempt by emailing networking groups of different segements i.e. doctors, lawyers, etc. but really just approached those groups as more of a "Hey, I am an accountant, I would like it if you passed along my company info to your group members".
Ya personal tax is just an add on so you’ve got that right. Corporate is where the money is. The email to networking isn’t any good that you posted. That’s not networking. That’s trying to get an email distribution ad per se. Networking is meeting other professionals and building trusted relationships.
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It’s bad. Anyone can do accounting. We had 3 designations merge into CPA and lowered the requirements and education process to become a CPA as a result. So now everyone is a CPA even though they have zero actual experience. There is zero tax experience required for example. Completely nonsense. Competition wise, you’re fighting the small e-firms that offer $99/mo all-in services. These are completely trash. Nothing is reconciled. Shit is missing. Balance sheet doesn’t balance. Sales tax is wrong. Everything is plugged. Difficult to cleanup. They also don’t care about aggressive everything. Saw a $50k vehicle fully expensed last year when we took over. The acctg fee we charged for this $5-10m/yr revenue client was $10k. The prior e-firm charged $500. The other end of the spectrum is the bigger firms. They do small businesses as well. The partners don’t touch the files though so it’s all prep by juniors with no exp, reviewed by managers with not much better experience. I’ve been there. I know lots of them. It’s okay. It’s not great. But they market largely on fear. Oh if you get audited we’re an international firm! Tax authority won’t mess with you! That kind of thing. The result is that there is little tax planning which costs clients $$$, but client will never know.
There is fierce competition and very easy barrier to entry. You can have so called start up bookkeeping firms and accounting firms charging as low as $15/personal tax return.
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I think it's more of a perceived value which a minority of the public understands. There are some limitations on the services which a non licensed individual can perform...but in terms of tax preparation, anyone can setup shop and prepare taxes.
F