Bilable hours per year sole practitioner

Hi, everyone. Starting my annual year end practice review.

May I survey you sole practitioners, how many hours do you expect to bill clients per year?

a lawyer dies and goes to the pearly gates where he asks, Why was I taken I am only 40. He receives the response, 40? According to your billable hours we figured you to be 68.

I spent two years working at a small EA-owned firm (after five years at H&R) where I had to track my work in 15-minute increments, first time in over 35 years of work life, I did it but did not like it at all. What made it worse was, the boss charged clients mostly by the form, but held staff accountable based on billable time.

I'm a sole practioner now primarily so I don't have to track billable hours (I charge by the form, with occasional hourly billing for Quickbooks or consulting with new clients). This allows me to spend as much time as I like in TaxProTalk without being questioned as to my productivity.

This year, I'll probably have about 1,600 billable hours. I track time in 5-minute increments, sometimes less.

In my heyday, annual hours were often in excess of 2,300. As I have released clients over the years, I have increase my rate. The idea is to work less and make the same.

According to my records, I've worked a little over 41 billable hours this year. This should not be surprising since I do not track time for fixed fee work and most of my work is fixed fee.

I am pretty pathetic, but I billed only 830 hours the last 12 months. But I also do some financial planning, and own a payroll business, and am working on growing my practice so my staff does more. I don't know how some of you bill 1600 hours - I'm jealous.

billable hours is nonsense for a small firm or sole practitioner, I have some returns that I work on for 4 hours for $500 and others that take 3 hours for $1500. What I bill is important, not what I bill per hour.

I am pretty pathetic, but I billed only 830 hours the last 12 months. But I also do some financial planning, and own a payroll business, and am working on growing my practice so my staff does more.

It's not pathetic at all. All you want to see is improvement over a period of time, if that is what you desire. And, we want that improvement in hours to translate to more top line dollars, if that too is what you desire.

The fact is, we get paid to work. And the more we work, the more we should get paid. Likewise, if we can make more or the same money by working the same or less, that is a good thing too.

I think billable hours is a good piece of information to nail down. Once you know it, you can use it in all kinds of metrics, which to me, is pretty important in the service/accounting business.

I agree, even for a sole proprietor or very small firm. I do use billable hours as a benchmark to make sure I am focusing on my clients work. I have a tendency to want to work on marketing and business development and sometimes I need to be brought back to what my clients need. Plus, I want to know if I am undercharging a client. While knowing what you bill is important, I think it's more important to know how effective you are using your time.

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I think billable hours is a good piece of information to nail down. Once you know it, you can use it in all kinds of metrics, which to me, is pretty important in the service/accounting business.

I don't know how some of you bill 1600 hours - I'm jealous.

Jealous? I'm horrified. How can you have a family life? Jeez Louise.

I thought 1,600 was actually pretty low. In the big-hour years, with 2200 or 2300 billable hours, things were harder.

40 hours a week x 50 weeks = 2,000 hours. Minus 1,600 = 400 annual hours for G&A.

How many annual G&A hours does one really need?

Chris Im pretty sure you spent 400 hours here on tpt last year. What else does your g&a time consist of?

Your typical IRS employee would clock in 2,000 hr/yr including paid time off, right?

What else does your g&a time consist of?

Inputting timesheets and sending out bills, mainly, plus 40-hours of CPE. But you imply TPT time is g&a time...

Billable hours really does not work for one person Sole Prop shops with temp help during the season. My software tracks the time I spend on a return but that is part of the total time spent on a client. We have to deal with phone calls, e-mails, personal visits. I base my fee on the # of forms filed and complexity.

For clients that need organization of records I charge a hourly fee @$15 for my temp.

For clients that need organization of records I charge a hourly fee @$15 for my temp.

Please tell me that you mistyped that. Unless your temp is the family dog, you're losing money, and anyway you should be billing the value of the headache your client doesn't want to deal with.

I agree.

For clients that need organization of records I charge a hourly fee @$15 for my temp.

... you should be billing the value of the headache your client doesn't want to deal with.

Mine's only 1000, but I'm really efficient and don't live to work...!

For clients that need organization of records I charge a hourly fee @$15 for my temp.

What's the minimum wage there that you can afford to bill out anything this low? I've never seen anything less than $30 for billing out of admin time.

This was about 10 years ago, but the last billable rates that I remember from the mid-size firm that I worked at (4 offices, about 150 employees) were approx this:

Admin time: $30-35 (?) per hour
Staff auditor: $70 (no CPA license yet)
Auditor: $150 (CPA license)
Manager: $250 (?)
Partner: $375

There were two "founding" partners (not sure what else you would call them, their names were on the building) and they billed out their time at $475 an hour. The tax dept billed out differently, but they were pretty hush-hush about that. I worked in Payroll, so I got to see the checks.

This was about a decade ago in CA.

My last year before I went out on my own I worked 2,930 hours and billed 2,286. I was the "2nd in command" for a sole practitioner. The problem was he worked every bit has hard as me and I didn't want that kind of life long-term.

Now I work closer to 2,500 hours per year and I'm lucky to have 1,400 billable. But my rates are much better and the hours are a little more flexible. I often leave just before 5:00, spend the evening with the family, and put in another 3 hours after everyone goes to bed (not every night, but 2 - 3 times per week depending on the work load).

I'm trying to cut back on that by developing better staff. We'll see.