INBOOKS · PRACTICAL GUIDANCE
Accounting for Professional Services
Link the engagement, work performed and billing schedule so partners can distinguish signed work from invoiced revenue and cash collected. Decide how project profitability will be measured before combining staff time, subcontractor fees and overhead.
Records and controls to prioritize
- Engagement letters and agreed billing milestones
- Approved time or delivery records tied to each project
- Unbilled-work and overdue-invoice review
- Subcontractor invoices and project-cost allocation rules
Practical questions
What should a project report show?
Show the agreed fee, invoiced amount, collections, direct costs and remaining work using clearly documented definitions.
How do we avoid overlooking billable work?
Compare completed milestones or approved time with invoices issued, and assign an owner to each unbilled item.
Scope the work around your operations
Describe the channels, entities, accounting system and periods involved. Agree the review and reporting scope before work starts.
Discuss your business →