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Billable hours

What amount of billable hours do you aim to achieve annually?

Do you use value billing, hourly billing, fixed-rate, or a combination?

Sharing your experiences would be greatly appreciated.

I do fixed rate mostly for billings. I have set prices for different types of personal tax returns. I average $50,000 - $55,000 in billings per year and probably average about 1.25 hrs per day in billable time so my average recovery rate is probably in the $110-$120/hr range. I deliberately work very part time although it probably averages closer to 2+ hours per day of billable time during February to June and less than an hour/day the rest of the year. I am curious how much people work as well.

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Value billing only, except for my bookkeeper. I bill her time hourly as it is basically just service work. Anything for tax or various forms of business consulting are a “value add”. After 40 years in tax I hope so…

Mostly onto the semi-retired track now, though people seem to keep finding me for corporate work. OTOH, have lost a few clients due to business sales, closures or moving. I work less than 15 hr per week most of the time now.

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As I am still increasing my client load, I am still spending a lot of time obtaining clients/meeting clients, virtually.
I am on a flat rate for most of my work, and spend about 25 hours of billable work.

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I am a sole practitioner, with approx 25 corp. year-end clients, 8 bookkeeping clients, and 100 personal tax clients (couples/families count as a single client) as of this year (my 4th year in practice).
2018: 1128 hrs billable, 914 hrs non-billable
2019: 1455 hrs billable, 1005 hrs non-billable
2020 (to date): 975 hrs billable, 940 hrs non-billable

This year (2020) I hired a bookkeeper (permanent, part-time) and a summer student (2 months full time, and now doing some work for me on a contract basis - corporate year-ends; working at home, on his own mostly). This has significantly increased my non-billable hours - training/mentoring, and slightly reduced my billable hours.

I use flat rates for some things - basic T1s, extra T1 schedules like T776/T2125/etc, T4s, ROEs, T2054s, etc.
I use hourly rates for most other stuff - tax consulting, accounting software setup and training, corporate year-ends; with a minimum charge (i.e. $1,000 for corporate year-end). My “stated” rates vary from $65 to $100 per hour depending on the complexity/risk/etc. I bill out my bookkeeper’s work at $35/hr. But, I tend to give a lot of discounts (repeat clients, poor people, non-profit groups, etc) - total revenue for 2019 was $82,000.

In my city (of approx. 35,000 population) average prices are approx:
$35/hr for bookkeeping
$75 for a single person’s T1 (I charge $65). Accounting firms charge about $150.
$2,500 for an average corp. year-end (my average bill is about $1,500) - NTR, not assurance work

I expect prices in other locations will differ, depending on the size of population, amount of competition, and cost of living.

Hope that helps!

Nezzer

I have students as well off and on - mostly in tax season to help with the data entry. You will find that if you can keep your summer student even just on a part time basis that they will rapidly get better and reduce your chargable time significantly which will increase your recovery rate. This will give you time to get more clients to keep your student and bookkeeper busy as much as they want to be.

I work in a specialized area (international personal taxes) and my stated bill out rate for advice is $200/hr. My assistants get paid 15% of what I can bill out when they start. At that point most of them are making between $15 and $20/hr over the course of a couple hundred hours of me teaching them taxes. The second year if they come back I pay them 20% and they generally get up to between $20 and $40/hr. My personal recovery rate for work I do teaching/reviewing work for first year students is usually $100/hr or so but by the second year it is usually up to $200/hr and that is without changing the base invoice to the client. I do have one on going very part time assistant and am always on the look out for more as he doesn’t have a lot of time available for me.

My minimum charge for a personal Canadian return is $150/person or $250/couple and goes up from there depending on the complicating factors which I charge $100 each for. Probably less than half my Canadian clients get by with $150 or $250 invoices. US returns start at $300. My city is technically only 35,000 but the larger metropolitan area is closer to 150,000. Most of my work is done remotely as less than half my client base lives within easy visiting distance. Many are international and I have never met them face to face or could even pick them out on the street if I did run into them as I deal with them by email.

Thanks @laurie. Hopefully that helps @NiceGuy as well.