In short

For consultants, agencies, law and design practices, bookkeeping follows the time-to-cash cycle: tracking billable time and expenses by client, raising invoices on retainers, milestones or hourly bills, recording client advances and retainers as liabilities until earned, reimbursable expenses rebilled to clients, and accounts receivable followed up so work completed actually turns into cash. Owner draws and salary are kept apart, and subscriptions are reviewed monthly so unused tools are cancelled.

Professional service firms sell time and expertise. That makes bookkeeping less about inventory and more about the journey from hours worked to invoices sent to cash collected. When that cycle is tracked well, you know which clients and projects are profitable and when money will arrive.

From time to invoice

Most firms bill in one of three ways: hourly, fixed-fee milestones or monthly retainers. We set up the books to match. Hours and expenses are tracked by client and project in your time system, invoices are raised on schedule, and income is recorded against the client and service line.

Retainers and advances

A client who pays upfront has not yet bought anything; you owe them the work. We record advances and retainers as a liability and recognise income as it is earned, so a large prepayment does not make one month look unusually profitable.

Reimbursable expenses

Travel, filing fees, software licences and subcontracted work are often passed on to clients. We code them so they are rebilled and tracked, and so you can see which ones were never recovered.

Receivables follow-up

Unpaid invoices are the most common cash problem in service businesses. Each month we produce an ageing report by client, and we can send reminders on your behalf if you want us to.

Records the IRS expects

The IRS describes what supporting documents to keep in what kind of records should I keep. For service firms, that means invoices, contracts, receipts for expenses and records of client advances.

Common problems we fix

  • Retainers booked as income on receipt
  • Rebillable expenses never invoiced
  • Owner draws mixed with salary or expenses
  • Subscriptions charged to personal cards

Monthly output

A reconciled ledger, profit by client or service line, a receivables ageing report and a list of unbilled time or expenses. See how we work with professional services firms, our bookkeeping services, or book a consultation.