Professional services accounting —
when your inventory is time.

If your current provider can't describe a three-way trust reconciliation, that is worth establishing before your state bar raises it rather than after.

What makes accounting different for a professional services firm?

Your inventory is time, and it is only worth something once it is billed and collected. That single fact changes the whole close: revenue has to be recognized against work performed rather than invoices raised, unbilled time sits on the balance sheet as an asset, and profit is decided by realization and utilization rather than by gross margin on a product. A generalist bookkeeper coding transactions will produce accurate books that tell you almost nothing about whether the work was worth doing.

What does an accountant for a professional services firm actually track?

Beyond the standard close: work in progress and unbilled time, realization rate against standard rates, utilization by person, profitability by project or client rather than only in aggregate, deferred revenue on retainers, and partner or owner draws separated properly from compensation.

Do you handle IOLTA or client trust accounts for law firms?

Yes, and they need their own discipline. Trust funds are reconciled separately from operating funds, on a three-way reconciliation, and never commingled. Most state bars require this and most generalist bookkeepers have never done one. If your current provider cannot describe a three-way reconciliation, that is worth knowing before the bar asks.

How do you handle retainers and deferred revenue?

A retainer is a liability until the work is done, not revenue when the money lands. Booking it correctly is what stops a firm looking wildly profitable in the month a retainer is received and unprofitable in the months the work actually happens.

Can you report profitability by client or project?

That is usually the reason firms come to us. It requires the ledger to be structured for it from the start — a chart of accounts and a job or class structure that supports the question. Retrofitting it onto books that were never set up that way is doable but it is a project, and we would scope it as one.

What size firm do you work with?

Typically $1M to $10M in revenue — enough people that utilization and realization genuinely matter, and not so large that you have a controller in-house already. Below that a good bookkeeper and a tax CPA usually cover you.

How much does it cost?

Foundation starts at $750 a month, Growth at $2,500 with controller oversight and a budget to run against. Firms wanting project-level profitability reporting are usually at Growth, because the reporting structure needs someone senior maintaining it.