A couple of years ago we looked at the business of public accounting. STATISTICS CANADA produces some comprehensive statistics – presumably from G.I.F.I. data for incorporated and unincorporated accounting firms.
We looked at data from unincorporated firms – since it was clearer that profit included the principal’s income. The top quartile (25% of firms that were most profitable) had $304K of revenue…
The profit for that same quartile – $296.9K – suggests that there wasn’t room to hire an entry-level CPA. Certainly you couldn’t hire any one full-time.
So it looks like practitioners either make money – or have something approaching ‘work-life-balance’. Doing both doesn’t seem like an option. It doesn’t look promising for anyone wanting to plan for succession either.
From our perspective it only makes sense to outsource some – or most – of the work to staff in remote locations. In investment parlance that would be called ‘arbitrage’…
With foreign exchange investments, the strategy known as arbitrage lets traders lock in gains by simultaneously purchasing and selling an identical security, commodity, or currency, across two different markets. This move lets traders capitalize on the differing prices for the same said asset across the two disparate regions represented on either side of the trade.
That is of course a little more complicated with human resources.
Our firm chose to work with the Philippines where the average monthly salary is…
…about $825 CDN… [SOURCE: Indeed.com]
Recent graduates in the Philippines are well-educated and can quickly fit in to a remote workforce. Providing an opportunity for these people to develop and advance in their careers is a good fit for a small firm that services small and medium-sized business in Canada. The seasonality of our profession is less important, when the carrying costs during training is significantly lower than for a comparable university graduate in Canada.
Admittedly they have no familiarity with Canadian taxation. Realistically however, university training in taxation is frankly abysmal in Canada anyway. It only serves as a starting point and must be supplemented with experience, advanced training and continuing professional development for each of us, in any event.
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