Additional Services – Additional Income
Don’t Ignore The Services Traditionally Offered by a Company’s Accountant
It wasn’t really that long ago. Only a few years ago most accountants/bookkeepers offered a complete service to their clients. Bookkeeping services included monthly reports and analysis, quarterly tax reports and year end tax filings. All of these services were traditionally provided by the company’s bookkeeper.It’s no surprise that a tax accountant is the perfect choice to help make decisions throughout the entire year that will affect year end tax results. And a qualified bookkeeper who is in the books on a monthly basis knows more about the financial workings of a small business than anyone else. If the bookkeeper and the tax accountant were the same person, he or she would be a powerhouse that would be invaluable to any business.
Create Profits For Your Practice by Offering Savings to Your Clients
Over the past several years, the day-to-day bookkeeping functions, the year end tax accounting and even payroll have been separated and provided by specialized services. Because the need for correlating information is critical to the business owner, if all of these services are provided by different third parties, it makes it more complicated for a small business owner to make informed decisions regarding his total financial situation.For most small businesses, it makes sense for one accountant to do the monthly bookkeeping functions, the tax filings and even payroll. By offering all these services, you not only save your clients the collective billings of each specialist, you create a more complete financial picture for your tax clients and additional income streams for yourself.
This Makes Sense… How do I Make it Happen?
Once you are doing the tax accounting for your clients, adding bookkeeping services is really quite simple. Because you are already familiar with their particular tax situation you are in a position to not only offer consultation during tax time, but have very valuable counsel to offer throughout the entire year. What’s more, they already trust you with what they consider one of the most important issues they deal with all year… their year-end tax filings.When you show your clients the benefits of bringing all of their accounting functions under one umbrella, you will be able to really have an impact on the bottom-line of their company and your tax preparation and accounting practice.
It Makes Sense for My Clients but Why Does it Make Sense for Me?
Making a shift from a “year-end” tax professional to a “year-round” tax professional is the first step. A client who is interested in using your bookkeeping services as well as your tax advice will be happy to compensate you on a monthly basis for your services. In fact, you’ll increase the amount you charge for tax planning and prepartation services.How does this work? In conjunction with providing bookkeeping services, by offering tax preparation services, you will have the opportunity to earn more income over the entire year than by a single year-end tax filing alone. Let’s take a look at the potential numbers.The graph above represents the income potential of combining a tax preparation practice with a bookkeeping service. The average small business will generate an income of around $300 to $400 per month for a freelance bookkeeper. This will amount to approximately 8-10 hours of work each month for the bookkeeper/accountant. Of course these are just averages, but that adds up to anywhere from $30 to $60 per hour. And you will experience this every month for every customer.The average business tax return is billed at $950 and amounts to 7 or 8 hours of work for a skilled tax preparer. However, by charging for your service at a monthly rate of just $100 (That’s $1200 a year), you’ve increased the tax billing to your client by $250 per year, and by adding additional services your clients will be willing to pay that extra $250.You are now in a position to offer valuable tax advice all year long. By doing all the bookkeeping functions, you have the numbers at your fingertips every single month to provide that valuable advice. What’s more, it will make year-end taxes much easier for you.
Your Monthly Billings Just Went Through the Roof!
Take another look at the graph and see what happens at only 5 clients. Your billing for that month is $2000. At 10 clients you’re billing $4000 per month! This is exciting. A year-round, profitable and rewarding business and all you need to do is add a few additional services and adapt your billing cycle.
How Would You Like to Semi-Retire in 12 Months?
Working with 10 clients or 20 hours per week will earn you around $4000 per month. I don’t know about you, but I think that’s a pretty good semi-retirement. Working with 20 clients at 40 hours per week will earn an average of $8000 per month. That’s $96,000 per year!