Bookkeeping for Professional Service Firms
Your inventory is hours. We keep books that show what's unbilled, what each engagement made, and what a retainer is actually doing on your balance sheet.
Your Inventory Is Hours. Most Books Can't See It.
A law firm, an engineering practice, a consultancy or an agency doesn't hold stock. What it holds is work that's been done and not yet billed, and time that was billed but will never be collected in full. Neither shows up in a standard profit and loss.
That's why professional services firms are so often profitable on paper and short on cash. The revenue sits in a timesheet, the cash sits thirty or sixty days behind it, and partner draws come out on a schedule that cares about neither.
We keep books that make the gap visible: what's earned but unbilled, what each engagement actually made after the people on it, and what a retainer is really doing on your balance sheet.
- Retainers recorded as revenue the day they arrive
- Unbilled work in progress invisible until it's written off
- Profit known by firm, never by engagement or client
- Realization rate nobody has ever calculated
- Owner comp, draws and distributions tangled together
- Subcontracted specialists paid without a clean 1099 trail
- Trust or client funds in the same mental bucket as operating
- Work in several states and no view of where
Everything a Professional Firm Needs, From One Team
Start with one service or hand over the whole back office. Most firms begin with one or two and expand when coordinating providers stops being worth their time.
Bookkeeping
Transactions coded weekly, reconciled and closed monthly, with revenue recognized when it's earned rather than when the money landed.
- Weekly coding, monthly reconciliation
- Retainers held as a liability until earned
- Statements days after close
Payroll & Owner Comp
Payroll for staff plus the part most firms get wrong: separating owner salary from draws and distributions so the structure holds up.
- Salary, bonus and contractor payments
- Payroll tax filings handled
- Partner draws kept out of payroll expense
AR & Collections
The hardest conversation in a professional firm is chasing a client you still have to work with. We make the calls so you don't have to.
- Invoicing on your billing cycle
- Aging watched, not just reported
- Collections calls we make, not you
Catch-Up & Cleanup
Firms that grew fast often have books that didn't. Diagnostic review first, written scope and fixed price before any work begins.
- Fixed price, quoted up front
- Retainer and WIP balances rebuilt
- No lecture about how it happened
Reporting & Advisory
Engagement-level profitability, realization, and utilization — the numbers that tell you which work to take more of and which to stop quoting.
- Profit by engagement, client or partner
- Controller oversight
- Forecasting at $2M revenue and up
The Full-Service Package
Bookkeeping, payroll, AP/AR, reporting, controller oversight and office support under one team at one flat monthly price.
- One team, one invoice
- No coordinating three providers
- Scoped before we begin
Monthly bookkeeping starts at $250. See what it costs → — including the five things that move the number and a free review of your books before we quote.
Different Firms, Same Underlying Problem
Every one of these sells expertise by the hour or the engagement. What changes is how the money arrives and what has to be tracked on the way.
Law Firms
Retainers that are a liability until earned, matter-level profitability, contingency work that distorts a monthly P&L, and client funds that have to stay provably separate from operating. We handle the bookkeeping side of that separation, including three-way reconciliation; your bar compliance obligations stay yours.
Engineering & Architecture
Long project cycles, phased billing, and revenue that should be recognized as the work is performed rather than when the invoice clears. Project-level margin you can see while the project is still open. Construction services →
Consultancies
Retainers and project fees side by side, subcontracted specialists, and utilization that determines whether a good year is actually a good year. Profit by engagement rather than by quarter.
Marketing & Creative Agencies
Pass-through costs that shouldn't inflate revenue — media spend, print, production — plus retainers, scope creep, and freelancers paid across a dozen platforms. Gross versus net revenue handled correctly.
IT & Managed Services
Recurring contracts alongside project work and hardware resale, each with different margins. Deferred revenue on annual agreements, and a clean read on which side of the business is actually paying for the other.
Multi-Partner & Multi-Entity Firms
Partner capital accounts, guaranteed payments, and the holding entity that owns the building. Each entity reconciled on its own, intercompany activity cleaned up monthly, consolidated reporting when you want it. Multi-entity bookkeeping →
Five Numbers Most Professional Firms Can't Produce
If your books can't answer these on demand, they're recording history rather than running the business.
Work in progress
Work performed and not yet billed. It's often your largest asset and it usually appears nowhere. Most firms discover it only at the moment they write it off.
Realization rate
What you actually collect against what you recorded. A firm billing at $300 an hour and realizing $210 is running a different business than the one it thinks it's running.
Profit per engagement
Which clients and which kinds of work actually pay. Almost every firm has a flagship client that loses money, and almost nobody has checked which one.
Unearned retainer balance
Money you're holding that isn't yours yet. Treating it as revenue produces a strong quarter that reverses later, and it misstates what you can safely draw.
True owner compensation
Salary, draws and distributions separated properly. Without it you can't tell whether the firm is profitable or whether you're simply paying yourself less than you think.
Why these and not revenue
Revenue tells you how busy you were. These five tell you whether being busy was worth it — which is the question that changes what you do next quarter.
Bookkeeping for Professional Services — Answered
What firm owners ask before handing over the books.
Should a retainer be recorded as revenue when we receive it?
No. An unearned retainer is a liability — money you hold that you haven't yet done the work for. It becomes revenue as the work is performed. Recording it on receipt is the single most common error we find in professional services books, and it causes real damage: it inflates a good quarter, reverses later, and tells you there's more available to draw than there actually is. If you ever need to refund one, the problem becomes obvious fast.
Can you track profit by engagement or by client?
Yes, and it's usually the reason firms call us. We set up the chart of accounts and class or project tracking so labor, subcontractors and direct costs land against the right engagement, and margin is visible while the work is open rather than the following year. Most firms discover one of two things: a client they treat as flagship is barely profitable, or a type of work they assumed was marginal is carrying the firm.
Do you work with law firms and client trust accounts?
We handle the bookkeeping side: keeping trust and operating activity provably separate, reconciling the trust bank account, the trust ledger and the individual client balances against each other, and flagging anything that doesn't tie. What we don't do is take on your compliance obligations — the rules governing client funds come from your state bar and responsibility for them stays with the firm. We give you records that make demonstrating compliance straightforward.
We're profitable but always short on cash. Why?
Usually the gap between performing work and collecting for it, made worse by owner draws set on a schedule rather than on what the firm actually produced. Your P&L records revenue when you bill; your bank account cares about when clients pay. Add unbilled work in progress and a slow collections cycle and a profitable firm can be genuinely short. Seeing it requires tracking WIP and aging alongside the P&L, which most firms don't.
We work with clients in several states. Does that complicate the books?
It can. Revenue by state needs tracking, and if you have staff working from other states that brings payroll registration and withholding obligations there. We keep the records so the picture is clear and coordinate with your CPA on the filing positions — we're not a CPA firm and don't determine nexus or file returns, but you shouldn't be reconstructing where revenue came from in March.
How much does bookkeeping cost for a professional firm?
Monthly bookkeeping starts at $250 — that covers under 100 transactions a month with two accounts to reconcile. Professional firms often sit above that once you add payroll, engagement-level tracking or multiple entities. We review your books for free before quoting, so the number comes from what's actually in the file. See pricing →
To be clear about scope: Bulverde Business Solutions provides bookkeeping, payroll, and financial operations services from Bulverde, Texas, serving the Hill Country, San Antonio, and clients across Texas. We are not a CPA firm. We do not provide tax, audit, or attest services, and nothing on this page is tax, legal, or investment advice. For firms holding client funds, we provide bookkeeping and reconciliation support; responsibility for compliance with your professional or regulatory body remains with the firm.
Find Out What Each Engagement Actually Made.
We'll review your books for free and show you what's sitting in unbilled work, what your realization looks like, and which engagements are carrying the firm.
Get a Free Book Review → Or call us directly at (830) 666-0417.
