TRUST ACCOUNTING, RETAINERS, WIP, PARTNER DRAWS. SET UP CORRECTLY.
Professional Services
Accounting for law firms, agencies, consultancies, and design studios. Trust accounts that stay clean. Retainers and WIP that reconcile. Client profitability visible the moment you want it.
Professional services run on time and contracts. Trust accounting, retainers, work-in-progress, and partner draws each have their own rules. We set up the chart of accounts so unbilled hours, retainers, and reimbursable expenses live in the right place, and so your effective hourly rate and profitability per client are visible the moment you want them.
WHAT WE SET UP:
- Trust accounting, retainer tracking, and unbilled WIP
- Partner draws, distributions, and owner-compensation structure
- Profitability reporting by client, project, or partner
- Software: QuickBooks Online or Xero, integrated with your time-and-billing or project management platform
WHAT MAKES PROFESSIONAL SERVICES DIFFERENT
Four things generic accountants get wrong for professional service firms.
Professional services accounting is not just billing plus payroll. Trust accounting, WIP, retainers, and partner economics each have their own rules and their own reporting standards. Here’s what we set up before your first close.
Trust accounting
For law firms, escrow and IOLTA accounts have their own rules. Interest, disbursements, and reconciliations must be tracked to the penny. We set up the trust ledger so state bar compliance is automatic, not an audit-week scramble.
Retainers & WIP
Retainers earned versus retainers received. WIP hours logged versus billed. Reimbursables incurred versus recovered. We map every one of these to the right place in the chart of accounts so cash flow, revenue recognition, and unearned liabilities all read cleanly.
Partner economics
Partner draws, distributions, guaranteed payments, and owner compensation each have their own tax treatment. We build the partnership structure so K-1s, capital accounts, and profit allocations reflect your operating agreement without year-end surprises.
Client profitability
Your effective hourly rate is not the same as your billable rate. We set up reporting that shows profitability by client, project, and partner, so you know which work to keep, which to reprice, and which to walk away from.
CASE STUDIES
See what’s possible when the plan fits your industry
Every case study below is a real Prudent client, with the actual numbers we delivered. See what’s possible when your tax strategy is built around your industry, your entity structure, and your long-term goals, not a generic template.
LET’S TALK
Want profitability by client, project, or partner?
Book a 30-minute call with a Prudent professional services specialist. We’ll walk through your trust setup, your WIP, and where the current setup is hiding profitable (or unprofitable) work.