Billable Hour Projects
While most of the services we perform are offered under a fixed price arrangement, certain cases do not lend themselves to it. This usually happens when we encounter a fairly complex situation -- one that is impossible for us to forecast how long it would take until we actually spend considerable time on the case. Since a mistake in either direction is certain to put either us or the client at a disadvantage, we only work on such cases under a billable-hour schedule.
Since we always strive for 100% transparency we developed the following procedure that provides complete accountability to the client while the process is underway:
- We collect a prepayment for 2 hours of work ($400) to analyze the client’s documentation.
- We inform the client what forms will be required (given the documentation provided) and provide a rough estimate of how long the project should take.
- If clients is happy to proceed, we collect an upfront payment for 5 hours of work ($1,000).
- We set up a shared spreadsheet where we update progress of the case (example of the spreadsheet is here) on a weekly basis.
- Every week we update the client on what was done during the week and how much time it took; client posts payment for it. This way we always start new week with a paid-up balance of 5 work hours.
Examples of cases that we prepared under the billable hour arrangement (personal details changed to protect anonymity)
- Client purchased a 7-unit apartment building in South Carolina
- Also has interests in 7 LLCs and will receive K1's from them
- Some stock transactions with both short- and long-term gains/losses
- Owns about 1 million euros of land in Bulgaria. Sold a portion on an installment sale in December 2012. (The contracts are complex.)
- Is developing houses in Bulgaria, probably 20 in progress/finished by Dec 31st, 2012 and 6-7 sold. (More complex contracts.)
- Own a Bulgarian company (structured as an SRL).
- Client has cash balances on accounts which are either paying interest subject to UK tax or are in cash ISA accounts which are UK tax free.
- Has three Share ISA
- Receives shares through my employer which he holds. Receives dividends on these shares
- Client has a check-the-box Swedish AB that incurred huge losses in 2011. The AB had a holding declare bankruptcy in July 2011, resulting in a EUR5 million loss.
- Moved to the UK on March 10, 2012, and I had transactions during the period March 10 to April 5, 2012.
- Had a lot of securities and futures transactions.
- CPA firm in Switzerland did forensic analysis for client’s tax returns for 2003-2008 years. We are asked to put all the information from them in IRS forms that can be filed with the IRS.