How we think about professional services
Firms like these sell hours and judgement. Their stock on hand is time that hasn't been billed yet, and their quietest leak is work that never makes it onto an invoice. So the ledger has to show more than money in and money out. It needs retainers received but not yet earned, work in progress, and the margin on each engagement once staff time and outside costs are counted.
In Coquitlam these firms tend to be small and close to their clients. Picture a family-law or notary practice near City Centre, a design studio or engineering consultant in Austin Heights, or a two-partner advisory firm with a modest office. Most of their clients are Tri-Cities households and owner-operators, which means many small files rather than a handful of large ones. Lots of engagements, modest balances and a steady flow of new retainers: that's the pattern our setup is designed for.
What makes the books different
- Retainers are a liability until earned. Money paid before the work is done is still owed to the client. We hold it in a liability account and move it into revenue as you bill against it. A heavy intake month then reads as what it is, not as a record month for sales.
- Every engagement has a code. Staff time, subconsultants and disbursements post against the file they belong to. You can see what a fixed-fee job cost you, and which kinds of work run over their quotes.
- PST on legal services. Legal services provided in BC are subject to PST under Bulletin PST 106, so law and notary practices register for PST and charge it on taxable fees. We set up the tax codes and invoice templates so it's charged correctly and the PST return matches the ledger.
- Trust money stays in its own system. For law and notary firms, the trust account belongs in dedicated trust-accounting software. We keep the general ledger and record fee transfers from trust to the operating account when bills go out; we don't run the trust ledger itself.
What a monthly close looks like for you
A typical month, start to finish:
- Reconcile the operating account, credit cards and payment processor
- Match retainer drawdowns to the invoices issued, and roll the unearned balance forward
- Compare hours recorded with hours billed, and list unbilled time by engagement
- Post subconsultant fees and disbursements to the right file
- Reconcile payroll and contractor payments to their source reports
By the 10th you receive a profit and loss, balance sheet, engagement margin report and aged receivables, with a short note on anything that changed. It's the same monthly bookkeeping process every client gets, tuned to how a firm bills. For a wider look at the rhythm, see our guide for Coquitlam owner-operators.
Tools we commonly use for professional services clients
- Ledger: QuickBooks Online or Xero
- Practice management: Clio for law practices; Harvest or a similar tool for time and project billing at design and consulting firms
- Bills and receipts: Dext for capture, Plooto for approving and paying suppliers
- Payroll: Wagepoint, connected to the ledger
We connect these once at setup, then check the sync each month instead of re-keying anything.
Partners we work with
Listed by type; we don't name firms here:
- CPA firms, for the corporate year-end and for incorporated professionals' personal returns. Our year-end preparation hands them reconciled books and a tidy file.
- Lawyers and notaries, for the firm's own corporate records and partnership or shareholder agreements
- Insurance brokers, for professional liability and office coverage
- Lenders, when a firm finances an office fit-out or a partner buy-in
A good fit if
- Your fees come in by retainer, fixed fee or the hour, and you want the books to keep those apart
- Your firm is small enough that a partner still signs off on the bills, and busy enough that a partner shouldn't be doing the bookkeeping
- You want margin by engagement every month and may later want fractional controller support for budgets and pricing