How To Make Multiple Six Figures As An Accountant | Incite Tax

At our firm, Insight Tax, we have a very unique structure on accountants and how they can grow within our organization. The traditional accounting firm model is that you put in your time, 10, 15 years down the road after selling your soul, you may be given the opportunity to become partner in that firm. We believe in value exchange, and if a team member has the ability to create value Then that value should be rewarded. We don't believe in this good old boy club idea that someone has to pay their dues in order to justify being promoted and making more money and having more responsibility. So within our firm, we have W-2 employees, and then we have independent contractors, some of which we call a licensee. The reason we went with this model is because we looked at franchising, and I didn't like the idea that as a franchise, I would control almost every aspect of the accountant's life. In my career, I enjoyed the flexibility and autonomy that came with being a business owner, and the more autonomy I had, The happier my job satisfaction was. So as a franchisee, I didn't want to put and exhibit that much control over somebody. So we went with a licensing model where someone, an accountant, can take benefit of the systems that we have, work under the brand of Insight Tax, but be completely autonomous. And set their own schedules. Ultimately, the licensee model of our business is an accountant gets the benefit of being a business owner without the headache that comes with being a business owner. So I wanted to walk you through what that looks like and some of the things that we support for the licensee and show you examples of accountants in our firm and what we're able to do. So as I mentioned, we don't believe in paying the dues. Licensee pay is usually greater than what the average partner at an accounting firm makes. And with an experienced accountant that joins our company, they could have the opportunity to become a licensee relatively quickly. We have even brought over people, accountants who had their own business, maybe a solopreneur, or they had a few employees, and they were just tired of the headache, but they loved the work. We have brought companies like that in, and they have become a licensee under our model. So I'll start with the pay structure, 'cause this is the most probably Relevant right now. And we'll start with the pay structure, the way it works, and then I'm gonna show you real examples. Because I know that as I presented this in the past, there are some initial thoughts of, well, I get 100% of the revenue right now, so why would I take a split on my revenue that I collect? So the way it works is on the first $200,000 collected, The licensee gets 50% of that. Then between $200,000 and $300,000, they get 55% of that. The next bucket is $300,000 to $400,000, they get 60% of that. Then we have $400,000 to $450,000, they get 65% of that. $450,000 to $500,000, 70%. And then anything above half a million collected, they take 90%. Um, Now, the reason there's a split there is because Insight Tax takes all the operational costs. There are very few expenses that the licensee pays for directly, and we'll get into that a little bit later as I share what we support and what the licensee gets as part of this relationship. The average net income for an accounting firm is just under 20%. And when we meet with solopreneurs, they say their, you know, their percentage is higher, but then we look at the numbers, it's not as good as what they would get under our model. In this case, you know, their effective pay rate, especially once you're over half a million, is very high. It's, you know, 70%, 80% margins. And that's They take that home, it's theirs. There's, there's no other operating costs that they have other than whatever they want to write off for tax purposes. So as part of the commission structure and the split, the goal is to help the licensee stay focused on the client work as much as possible. And our firm on the backend services and operations tries to take as much of the non-client service things off their plate. That way they can have more clients, make more money, take more home, and enjoy life because other people are helping them with the stuff that is less enjoyable than the client work. So, as an example, the way our tax processes work is we have a support team that can gather source docs. Now, as a licensee, you may choose to have an admin, which most of ours do because they see the investment is worth it. They are trained in our system, and then they gather source documents. Our accountants will do the bulk of the data entry for the tax returns so that the licensee will get on their project list a tax return that's ready for review. They review it because they have the relationship with the client. They make any tweaks based on information they may have that the, that our accounting team didn't. They finalize it, then the team with the admin will email the client a copy of the return. We take care of the 8879 filings, we get the source docs back to the client. So the accountant's involvement as a licensee is, in most cases, I'm reviewing the return, I'm finalizing it. If the client has questions about the return that they have finalized, they will handle that relationship. So again, we, we help return source docs, mailing— we don't charge the licensee to mail documents— e-filing, all the stuff that goes into that, we handle the cost. Tracking down payments for clients, that can be a headache for some business owners. We take that off the licensee's plate. We have the merchant processing system, which surprisingly some people in business don't even have that as an option, which can detract the type of clients they could be attracting anyways. So we handle all that. We have some client portals that are very easy for the clients to use, specialized computer software including things like Lacerte and a file— a filing storage system, an electronic filing storage system. QuickBooks. We have access to QuickBooks Online. Clients will pay for that themselves though. Desktop QuickBooks Desktop Server if necessary. We have a payroll solution and we have a CRM, all of which is not cheap. We utilize Slack for communication. We have some systems that allow us to set up reminders for the client so that They're constantly being reminded without the licensee having to follow up on things like that. We have an immense amount of training, training that I would— the quality of training of which I would put up against any Big 4 training. I, I worked at Deloitte. I saw the 2-week training that we got and the ongoing stuff. And yeah, while there's a lot of smart people there, everybody was a little bit out for their own. That's not how we work under our brand at Insight. Um, we have some robust training and we have ongoing training. Um, if there needs to be phone hardware for the licensee instead of using an app, we, you know, there's solutions there. If the licensee wants to grow their business and they feel like they need even more support than what we offer, we will hire the team members on their behalf. They'll go through our hiring process, which is been much better at getting quality team members than what a licensee or small business owner is going to have the experience with. We at this point have hired many, many, many, many team members, more, more than a solopreneur or a small accounting firm. Filing extensions, we make that really easy for the licensee. We have remote server access, so licensees can work wherever they want, whenever they want. 1099 solutions, obviously email, gotta have email, time tracking. We also provide access to our, all of our processes. It's the backend system. It's what allows our professionals to produce a tax return at a high quality that's satisfying to the client. And we constantly are evolving that with best practices and observations and new technology as things come out. None of which the licensee has to spend any time researching or figuring out. It just happens, which is really great for them. We also provide, as part of the commission split, up to 20 hours of accounting support per week. And so that means the— these accountants that would be doing the data prep, or if it's bookkeeping or other things, you know, the first 20 hours of each week are covered. By Insight Tax. So we have some licensees that the work that they need done and support they need is under that 20 weeks, uh, that 20 hours every week. And so they're, they're not paying a dime for all the, the man-hours that get spent on their stuff. And of course, the most important resource that is provided is complete flexibility for the licensee. Licensees set their own hours, they're their own business. And as long as the client's getting taken care of, which is the goal everywhere, right, then there's nothing we need to worry about. So I shared with you our commission split and the way that works, and it does reset every January. So the first $200,000 collected every year is paid out at 50%. Now we have some licensees who get through that first tier Within a couple months. So I wanted to share with you some examples of real-life scenarios with accountants that we've had under the structure to show you what they're able to collect. And this is very relevant because what I haven't said yet is how amazing our structure is and the way our systems work with the accountant being able to focus just on the client work. We have a very good marketing team and we get thousands of leads a year. We also have a full-time sales team. So a marketing lead comes in, our sales team closes them, meaning we have a signed contract from a new client. It's at that point the licensee will have the new client show up on their schedule. So the licensee doesn't even need to do any prospecting. New clients will just be assigned to them and they show up So that when our licensee meets with the new client, the new client's already given us payment information, they've already told us what services they want. It's the licensee's job then to just confirm that we're all on the same page, these are the services we're going to offer you, and get to serving the client. And that's it. There's no awkward sales calls or wasted hours with meeting with people who aren't going to sign up. You don't have to go to networking events. Uh, nothing like that. So we are able to build a licensee's business very quickly, and I'm going to show you some of those numbers. But so in this first example, you can see the licensee here. They have some history with us, and so, you know, they started around 212, and you can kind of see the steady climb. And the last year that I pulled for the data They'd had $600,000 in revenue. With this $600,000 collected, the licensee made $372,000. That's their take-home pay. And all they had to do was serve clients. And I can tell you this specific licensee works maybe 45 hours a week during tax season, takes a ton of weekends off the rest of the year. has a very nice life and is not required to work the crazy hours that a normal traditional CPA firm would have. Next example, we have a scenario here where you can see they haven't been with us as long, but, you know, some jumps, $100,000 jump from one year, then up $200,000, and this licensee kind of wanted to maintain at this level. They were happy with the workload and everything, and so they collected $357,000. Under this scenario, the licensee made $189,000. Obviously I'm rounding. Next example, another licensee has been with us for a while. You can see these jumps, uh, $148,000 in their first year, $100,000 increase, a little bit less, a little bit less, but still increasing. So $395,000 was the, was the last number I pulled from them for this video on what they collected. And that's about $212,000 in compensation that they received. Next example, in 3 years they went from no clients to a book of $258,000. Their compensation on this is $132,000. Next example, they started with us closer to the end of a year, so almost nothing was assigned to them as they were getting used to the systems. And then the following year, $225,000 in collections, which is a payment to them, compensation of $113,000. And the thing is, all those numbers that we just covered are a little bit older numbers, and we continue to improve as a firm. So these next 2 examples are ones that are more recent to what we offer because our systems are better. So this person started with us and they initially had no clients assigned to them. $200,000, almost $200,000 in collections in the first year. And I even pulled this number before the year is over. It will go higher. They're at $343,000 currently in collections. Which is a payout of $180,000. Because when clients sign up, we can get them to see the benefit of paying us a monthly fee. We also track the estimated annual revenue based on those monthly fees, and I can tell you this particular licensee already has $600,000 in collections, um, that is, is in their book. And that happened within a very short window. This simply is not offered by other firms. It's crazy. And the last example, very similar to what we just went over, except in this case, uh, it was zero to a large amount in even a shorter amount of time. Again, the numbers were pulled early before the year was over, but at the time, $350,000 in collections Which is about $185,000 in compensation. What we offer is unheard of. And one of the reasons is because in traditional firms, there's just this greed that exists and this old school mindset that I don't know if we're going to be able to break through that. Our struggle with this model is that when we try to explain it to people, it sounds too good to be true. And if you talked to our licensees, which anyone is welcome to, They might tell you, yeah, it's really— it's almost too good to be true. I can't believe this is happening. But this is the reality. We want licensees because we need more business owners supported. And the best way to ensure that business owners can get support for the long term is to keep accountants for the long term. We just want good people. If you do good work, this model could be perfect for you. And we also let our licensees choose the services that they want. We have some who have zero interest in bookkeeping, so all they do is tax work and tax consulting and strategies. We have others who don't know tax very well, if at all. They certainly learn by being part of what we train. But they are primarily bookkeeping businesses and cash flow management consulting, and that's okay. The licensees have the opportunity to choose the services that give them the most satisfaction. So they get to do the work that they love, and basically only the work that they love, while getting paid a crazy amount of money that other traditional firms are not offering in a much shorter window. There's no 10-year, like, guaranteed, hey, you have to pay your dues. When the accountant can prove and we can see that they're creating the value and are capable of doing this, they get the opportunity. It's that simple. So this is our unique model. This is why we believe our firm has the best career opportunities for anyone who wants to be an accountant, who enjoys the bookkeeping or tax or any sort of accounting work that clients are willing to pay for, this is the best option out there. If you have any questions, please feel free to reach out to us. We love answering them. We believe with this model we can change the accounting industry, and if we can't, we're at least going to try our darndest to influence them enough where they can provide a better work-life balance to their accountants. But as of right now, no one can match what we do. And I know we're smaller than a lot of these bigger firms, but that's to our advantage because we can do these things. We don't have 100 years of crap to unwind. We can reward and show value to our accountants with this model, and they're happy and we're happy.