Professional Services
Professional services firms need more than bookkeeping. You need controller-level visibility into WIP, profitability by client, and partner economics that actually make sense.
The Industry
Professional services firms sell expertise and time. Revenue depends on billable hours, project fees, or retainers. But the accounting is more complicated than a simple time-for-money exchange. Work gets done in March, invoiced in April, and paid in June. A retainer collected today covers work not yet performed. A project billed at completion might have months of unbilled time sitting in WIP. Standard bookkeeping treats all of this as cash in, cash out. That approach misses the real financial picture entirely.
Partner economics add another layer. When three attorneys or four architects share a firm, the questions multiply. Who generated the revenue? Who incurred the expenses? How do you split profit fairly when one partner brings in work and another executes it? These are not bookkeeping questions. They require controller-level thinking and CFO-level strategy.
Who This Covers
Who This Covers
Law firms, architecture and engineering practices, marketing and creative agencies, management consultants, IT consultants, and other professional firms throughout South Florida. Businesses where expertise is the product and people are the primary cost.
Why It Gets Complicated
Why It Gets Complicated
Revenue recognition that doesn’t match cash receipts. Work in progress that lives on the balance sheet for months. Trust accounts and client funds that require strict separation. Partner compensation structures that depend on accurate profitability data. Multi-location or multi-practice operations where overhead allocation matters.
What We Handle
We bring controller-level oversight to your accounting function. That means proper revenue recognition based on when work is performed, not just when invoices go out or payments arrive. It means WIP tracking that shows you exactly how much unbilled time is sitting on the books and whether those hours will actually convert to collected revenue. For law firms with IOLTA requirements, we ensure trust accounting stays compliant and separate from operating funds.
We also build the reporting you need to run the business. Profitability by client, by matter, by practice area, by partner. Realization rates that show the gap between hours worked and hours collected. Utilization metrics that reveal whether your team is generating enough billable work to cover overhead. This is the data that informs partner draws, hiring decisions, and strategic planning. It requires someone who understands professional services economics, not just debits and credits.
Revenue Recognition and WIP
Revenue Recognition and WIP
We track work in progress properly so your financials reflect economic reality. Unbilled time gets recorded as an asset. Revenue gets recognized when earned. You see actual performance, not a distorted cash-basis picture that fluctuates wildly based on collection timing.
Profitability Analysis
Profitability Analysis
We break down financial performance by the dimensions that matter. Which clients generate healthy margins? Which practice areas carry the firm? Which partners contribute what? This analysis drives compensation discussions, pricing decisions, and strategic focus.
Common Problems
The most dangerous issue in professional services is mistaking collections for profitability. A big month feels like a great month until you realize those payments were for work done three months ago when expenses were higher. Cash-basis accounting hides the truth. You think you made money when you actually lost it. You think a client is profitable when the realization rate on their matters is 60%.
Partner disagreements often trace back to inadequate financial reporting. When nobody can agree on the numbers, compensation discussions become political instead of analytical. One partner believes they generated more revenue. Another thinks they were allocated unfair overhead. Without clear data, these conversations go in circles. The frustration builds until someone leaves or the firm splits.
Collection Cycle Surprises
Collection Cycle Surprises
Professional services firms often wait 60 to 90 days for payment. When a large client delays or disputes an invoice, cash flow tightens fast. Without proper receivables aging and WIP visibility, these surprises hit harder than they should.
Overhead Allocation Disputes
Overhead Allocation Disputes
Rent, staff, technology, insurance. How do you divide these costs among partners or practice areas? The wrong approach creates resentment. A practice area that looks profitable might be subsidized by another. Partners make decisions based on numbers that don’t reflect reality.
What Changes
You gain visibility into what actually drives profit. Not just which clients pay the biggest invoices, but which clients generate healthy margins after accounting for the time invested. You know which matters are worth pursuing and which ones drain resources. Pricing decisions and engagement terms get informed by data instead of intuition.
Partner conversations become productive. When the numbers are clear and trusted, compensation discussions focus on strategy instead of argument. You can model different scenarios for partner draws, evaluate the financial impact of adding a new associate, or assess whether opening a second office makes sense. The financial function stops being a compliance burden and becomes a tool for building the firm you want.
Strategic Clarity
Strategic Clarity
You make decisions based on reliable financial intelligence. Grow a practice area, exit a client relationship, adjust your billing rates. These choices carry less risk when backed by clean data and thoughtful analysis.
Partner Alignment
Partner Alignment
Clear profitability reporting by partner and practice area removes guesswork from compensation discussions. Everyone sees the same numbers. Disagreements can be resolved with data instead of politics. The partnership runs smoother.
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Let's Talk About Your Business
Tell us about your business and your goals. We'll discuss how Jargo can support your financial operations and growth.