HBSMC Fee Summary – 2003 thru 2010

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Offline Earnings during the last Decade

I have been working out of my home since March 2003, doing both ‘online’ and ‘offline’ work. Basically … whatever works – is my work. Everything I do to earn income is my HBS Management Consultants (HBSMC) business as I am the Proprietor and consider everything to be a division or a subset of this business. Honestly, I don’t really care what I do .. as long as I earn money. If certain aspects of my business needs concentrating on and is producing at the expense of another aspect of my business, I tend to go where the money is, because I believe in the bottom line being my end result.

These figures that follow do not include my “online” earnings – just those earnings that represent the “accounting, bookkeeping, income tax preparation, systems and consulting” portion of my “offline” earnings. I am stating them as a percentage to further dilute the possibility of figuring out what my earnings truly are. I will say that for the physical dollars involved, I still consider myself to be a non-profit organization, if anybody asks 😀 If people I know ask … I would suggest that I spend 75% of my time doing offline work and the other 75% doing online work! That’s right – I don’t sleep much~

Year Ends
Income Tax
  • 2003
80.28% 11.35% 8.37%
  • 2004
73.72% 16.45% 9.83%
  • 2005
64.59% 12.35% 23.06%
  • 2006
57.35% 28.79% 13.86%
  • 2007
53.93% 31.09% 14.98%
  • 2008
65.11% 19.14% 15.75%
  • 2009
39.57% 44.91% 15.52%
  • 2010
42.14% 45.21% 12.65%

* YEAR ENDS – this includes all work related to financial statement preparation, T2 Corporation preparation and filing, T3/T4/T5 and other election preparation and filing, as well as valuations, and sub-contracting related to preparation of year ends by other accountants. This also include personal income tax preparation of the owners or shareholders of the businesses that year ends were performed, as well as financial remuneration calculations and financial planning.

* MONTHLIES – this includes monthly accounting, GST and PST and Payroll Deduction calculations, consulting and systems analysis and training, and other ongoing matters. Most monthly accounting turns into year end accounting, but I keep and bill the year end work separately as year end work.

* INCOME TAXES – this represents personal tax clients that I only prepare income tax returns on an annual basis, although may include subsequent reviews, planning and going over assessment notices or filing T1-Adj amendments.

Without scientific proof or accounting reconciliation, I feel that the income tax portion of my business represents more than 75% of my offline software and office expenses during the year, and about 65% of my time keeping up with research, meetings, and my own professional development (if any) as I do work on my own and I have to keep current and updated.

The year end work is by far the most lucrative because it takes more time to prepare and there are usually no stops and starts. Working 15 hours on one corporate client can be done in 2 days where, 15 hours of personal income tax work takes much longer … printing, assembling, meeting clients, filing time, and going over subsequent assessments and reviews. You can’t meet everybody ‘on their way home from work’ when it’s convenient for them.

The monthly accounting work is by far the most regular, because it is recurring work. Often, it also helps with the cash flow budgeting expenses. The only problem is that most monthly clients need to be done by the end of the month, and the clients don’t get all the stuff until the middle or latter part of the month – yet have it all ready for me. Usually the last week of every month is almost worst than tax season time-wise. A few monthly clients prefer to supply me the information quarterly, although I do 3 monthlies each time. This always adds to the stress and time management when GST is due at the end of the month and I receive 3 months on the 28th or something like that.

Offline Earnings Estimate for the next Decade

I don’t think it’s fair to drop my personal income tax clients – THIS YEAR. I should have prepared them last year, but I was distracted when my father got ill, who passed away December 25, 2010. My goal this year is to inform my personal tax clients of my decision to maintain and focus on my corporate clients in the future, as I have to start thinking of my own bottom line. This is a very hard decision for me to make, because I can say that for the most part, my personal tax clients have been more loyal and always there for me over the years and personal relationships have grown over the longest of time that I have dealt with my clients since 2003 and many many years for some who were also clients of my father while he was practicing Chartered Accountant.

I think 50/50 mix between the monthly and corporate work is a good mix. I know I could increase my rates and earn more if I lean towards the year end work, but have less stress and probably maintain the current rates with the monthly and bookkeeping work. Normally I do all the year end work for my monthly clients. There is a possibility of me doing month end work, and letting other accountants or Chartered Accountants get involved and do the year end work. I have lot to think of in 2011.


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