Price of Accounting Firms and the Differences Between Chargeable Time and Realization Per Job

The cost of accounting services varies widely, depending on several variables, but most importantly it is largely affected by the number of accounts processed each month. The more accounts processed the higher the costs become since each one represents an entry in the book of accounts. The higher the number of processed accounts per month the higher the costs will be. The aim therefore is to keep as few accounts open as possible, while at the same time processing as much as possible, and therefore the main ways in which businesses control their cost of accounting service are to control the number and types of accounts processed per month, the average number of accounts per day and the average number of transactions processed each month.

All these three elements go together to determine the cost of accounting. The average number of transactions per day, the average number of account entries per day and the average number of chargeable hours per month are called the 'chargeable hours'. The average account entry or transaction is called the 'chargeable time' and the number of transactions or account entries that took place in a month is called the 'average chargeable time'. All of these factors have direct links to the cost of accounting.

To give a clearer picture of the link between the cost of accounting and revenue, let us consider the following example. Let us assume that a PRICE OF ACCOUNTING FIRM has an agreement with three other PRICE OF ACCOUNTING FIRMS that they will charge their customers who purchase their products at their store a minimum of five hundred dollars per transaction. The PRICE OF ACCOUNTING FIRM has an exclusive agreement with the suppliers of the products, to whom they sell their wares on behalf of their customers at a rate of five hundred dollars per transaction. Now if a customer visits all three stores each of these suppliers at five separate times per week for a month, we get a total of twenty-five hundred transactions that would be charged at a combined price of five hundred dollars per transaction.

Now if we assume that the minimum amount of five hundred dollars per transaction is the norm, then the total amount of revenue earned by a PRICE OF ACCOUNTING FIRM would be ten thousand nine hundred and forty-two dollars. If we assume that each of the three suppliers provided a charge of one hundred and thirty-five dollars per transaction, the resulting figure would be sixty-five hundred transactions that would be charged at a combined total of one hundred and sixty-five dollars per transaction. This comes to a total of eleven thousand nine hundred and forty-four thousand nine hundred and forty-two dollars of revenue that has been realized from the sale of goods to customers. If we assume that each of the three suppliers pays the corresponding charge on the same day, then we still arrive at a figure of sixty-five hundred transactions that would be processed and realized from the sale of goods to customers at the stores. Click here for more details about BÁO GIÁ DỊCH VỤ KẾ TOÁN

The PRICE OF ACCOUNTING FIRM realizes only eighty-seven cents of revenue per transaction, which means that it would only earn approximately two thousand and eight hundred fifty thousand dollars in profit. If the minimum chargeable hours is increased to one hundred and seventy, then the revenue realized from the sales would be up to one hundred and sixteen thousand dollars. However, it should be noted that these figures are only for the first half year of the business. Once the first profit is realized, the figures will decrease with the normal loss of nine-tenths of a percent.

Now, if we compare these figures with those realized by other accounting firms in the same market, then we can clearly see that the income realized by a PRICE OF ACCOUNTING FIRM company is far less than the income earned by many other similar firms. The difference between chargeable hours and realized revenue is thus an important factor to consider in choosing the most suitable accounting firm to do business with. This difference should be taken into consideration while comparing the services offered by different firms because the amount realized per job may not necessarily be the same. A large number of firms with a high chargeable time rate may also offer low or modest revenue. Thus, before selecting a firm to handle your accounts, you need to make sure that it offers you a reasonable balance between its charges and revenue.