Time required to service a typical client?
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Hello everyone,
I'm considering starting my own accounting and bookkeeping practice and
I'm trying to develop an estimate of how many clients we would be able to handle. I'm a CPA and will be doing taxes, consulting, reviews and compilations as well, but bookkeeping would probably account for most of our revenues.
I would hire a couple of college students to assist part time with data entry and bank recs. I'll review their work, make adjusting entries and generate the monthly reporting packages.
I'd to get a better idea of the actual time needed to handle the average bookkeeping client each month. I realize it will vary quite a bit depending on the complexity of each client, but I'm just trying to get an average.
For example, say a typical client has fewer approximately 200 sales transactions each month, they write 100 checks and there are 5 employees for which we'll do payroll. The monthly bookkeeping flat fee for such a client would be around $300, budgeted as follows:
Supervising accountant 2 hrs @ $75 = $150
Junior bookkeeper 5 hrs @ $30 = 150
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Total fee $300
Are these reasonable assumptions? If so, then a junior bookkeeper should be able to handle 7 to 8 clients in a 40 hour week, and the supervisor should be able to handle 15 to 20 clients, with time left for other projects.
On flat fee projects (e.g. ongoing monthly bookkeeping service), do you usually come out ahead (full realization), or do you fall short?
Are there any specific businesses or industries that make the best bookkeeping clients (e.g. medical offices, retail, property management, etc.)?
Also, I'd like to get opinions on what additional services would yield the most "bang for the buck" for a small practice (corporate formation services, business management, etc.).
Thanks in advance!
Solved!
Answer
I'm glad to see you're thinking it through and planning things out. However, a few comments for you to consider:
Since you're a CPA, you mentioned doing compilations and reviews. I'd suggest you check into liability insurance--it is much higher for reviews and'/or audits. Perhaps you don't want to get coverage for it, unless or until you get a client that needs a review.
I'd recommend you just start on your own and do not hire anyone until you have enough clients that you cannot handle the work load on your own. Especially given the economy right now--minimize your risks and don't take on too much overhead too fast. Then, you'll have experience doing the bookkeeping to know how long things take.
You should/could specialize in industries where you have expertise and/or interests. You can also specialize based on the types of services you provide.
Check out the FREE online marketing course I wrote and recorded for Intuit Academy called 'Effective Marketing' at http://accountant.intuit.com/training in the online courses, self-study, no-CPE. I think you'll find some helpful info there.
Also, I recommend you join the ProAdvisor Program and become a Certified QuickBooks ProAdvisor--providing QB consutling & training can be a very lucrative area too. Here's a quick video with an overview of the ProAdvisor Program: http://www.youtube.com/watch?v=cnICQBash4k&feature=channel_page
PLEASE mark this answer as solved or post additional questions. Thanks so much!!!
Michelle L. Long, CPA, MBA
Author of the book "Successful QuickBooks Consulting: The Comprehensive Guide to Starting and Growing a QuickBooks Consulting Business"
National Trainer for Intuit Trainer/Writer Network
Advanced Certified QuickBooks ProAdvisor
Author of the book "Successful QuickBooks Consulting"
http://www.LongforSuccess.com
Linkedin Group: http://bit.ly/9e3RB
Facebook Page: http://bit.ly/1q72VW
Comment
Hi Michelle,
Thanks for your advice. By the way, I have your QB Consulting book and it's been very helpful, in addition to your many posts on the forum.
Yes, E&O insurance would be very expensive - probably $10k or so - if I offer attestation services. Not sure how much lower it would be with non-attestation services only, but I'll get some estimates. Lots of small CPA offices operate without E&O insurance...not very smart. I've heard of a couple of guys who have lost everything in lawsuits.
I won't hire anyone until things get rolling and even then, they would be subcontractors on a per diem basis. However, I'm trying to get an idea how long the average QB bookkeeper spends on an average client each month, and also if anyone hires part-timers to assist, how easy it is to find good people that don't require a lot of supervision. Any feedback on this would be appreciated.
Comment
BTW, I was a Qb Pro Advisor last year (QB 2008 Accountant's Edition), but haven't purchased 2009. Is one required to retake the entire course/exam each year, or is there a more condensed "update" course/exam for Pro Advisors who are merely renewing their membership?
I didn't get any clients through the website, though admittedly, my profile wasn't very thorough, nor did I have a website (I was busy at my job and didn't really have time to do QB work anyway).
I'll definitely watch your online marketing video.
Solved!
You need to take the certification exam every year, but after you've been certified for 2 consecutive years, you're eligible for the update certification (ie you can skip the lessons & quizzes & just take the exams, but you don't get CPE for it). After 3 consecutive years, you're eligible for the advanced Certification--which puts you at the top of the referral database based on location.
PLEASE mark this answer as solved or post additional questions. Thanks so much!!!
Michelle L. Long, CPA, MBA
Author of the book "Successful QuickBooks Consulting: The Comprehensive Guide to Starting and Growing a QuickBooks Consulting Business"
National Trainer for Intuit Trainer/Writer Network
Advanced Certified QuickBooks ProAdvisor
Author of the book "Successful QuickBooks Consulting"
http://www.LongforSuccess.com
Linkedin Group: http://bit.ly/9e3RB
Facebook Page: http://bit.ly/1q72VW
Comment
Sorry for the typos...apparently, posts can't be edited.