Sometimes clients are confused as to how we bill and will question why certain services are billed. In the next few paragraphs, we will try to explain what is involved in the billing process.
CPAs have only one product to sell – our expertise in audit, accounting and taxation. It takes years of study and ongoing education to keep current with the AICPA standards and IRS codes which are constantly changing. Accounting firms spend thousands of dollars each year providing education to staff, and purchasing the newest accounting, audit and tax literature and software. In order to bill this expertise, we must bill for our time, whether it be for a consultation, preparation of a tax return or performing an audit.
Just as a doctor bills for a follow up visit, a mechanic bills for listening to a car, and an attorney bills for research, we too must bill for all of our time. As in other professions, we have standard billing rates that we use for our staff based on the experience and expertise of the staff member.
When we bill a tax return, we combine two factors: the amount of time spent on the return and the complexity of the return. We try to bill what we believe is a fair amount for the service provided. For instance, if a simple return takes us much longer to complete than we think it should, we lower the bill to what we think is a fair amount. If the return is generally the same complexity as in prior years, we will sometimes increase the bill a small amount to cover our increased costs of business. Our method of using both a combination of time and level of complexity is called value billing.
In addition to the costs of continuing education, technical literature and software, there are other factors involved in determining our billing rates.Â Health insurance, liability insurance, personnel costs, professional services, computer costs, state and national professional fees, peer review costs, facilities, utilities and taxes are all a part of our overhead. EFS works very hard at keeping these costs to a minimum by closely monitoring them; we change vendors when necessary, and each staff member works hard and long hours.
We make every attempt to keep bills reasonable and provide you with the best service we can.