Professional Services
Client funds must stay separate from operating money. We handle trust accounting, IOLTA reconciliation, and project-based billing for law firms, architects, and engineers.
Client Money Is Not Your Money
The most important rule in professional services accounting is simple to state and easy to violate. Client funds do not belong to you until the work is done. For attorneys, this means IOLTA compliance. Every dollar of a client retainer sits in a trust account until it has been earned through billable work. The Florida Bar treats commingling as a serious ethical violation, and the consequences range from disciplinary action to losing your license entirely.
Architects, engineers, and surveyors deal with a similar dynamic. Client deposits and retainers are collected before the project begins. Those funds represent an obligation to perform future work, not revenue you can spend today. Without proper tracking, it becomes dangerously easy to treat that cash as available when it still belongs to someone else.
Three-Way Reconciliation
Three-Way Reconciliation
For law firms, the trust account must reconcile three ways every month. The bank statement, the general trust ledger, and each individual client sub-ledger all need to match. If they don’t, you have a problem that needs to be found and resolved immediately. We perform this reconciliation monthly so discrepancies get caught while they are still small and traceable.
Retainer Management
Retainer Management
Client retainers need to move from the trust or liability account to operating revenue only as work is performed and billed against them. We track retainer balances by client so you always know how much has been earned, how much remains available, and when it is time to request a replenishment from the client.
Billing and Getting Paid
Professional services revenue is earned over time, not at a single point of sale. An architect might work on a project for eight months with billing tied to design phases. An attorney bills monthly based on hours worked. An engineering firm bills on percentage of completion. Each of these creates a different revenue recognition pattern that needs to be tracked accurately so your financial statements reflect what has actually been earned rather than what has simply been invoiced.
Then there is the collection problem. Professional service clients are often slow to pay. Net 30 quietly becomes net 60, and before you know it, you have tens of thousands in outstanding receivables while payroll is due Friday. We track aging receivables and give you clear visibility into what is owed, how long it has been sitting, and which clients consistently pay late so you can follow up before balances get out of hand.
Reimbursable Expenses
Reimbursable Expenses
Filing fees, travel costs, printing, permits, and subcontractor invoices are all passed through to the client. But only if they are tracked and included on the invoice. We categorize reimbursable expenses by project and client so nothing falls through the cracks when it comes time to bill. Those missed pass-throughs add up fast over the course of a year.
Partner and Owner Compensation
Partner and Owner Compensation
When two or three professionals share a firm, the financials need to show who brought in what revenue and what each partner’s draw looks like relative to the firm’s actual profitability. We provide clear reporting that keeps compensation discussions grounded in real numbers instead of assumptions or feelings about who is carrying more weight.
Where Things Break Down
Trust account errors are the most damaging mistake a professional services firm can make. An attorney who accidentally pays an office supply bill from the IOLTA account has created a compliance issue that may need to be reported to the bar. It does not matter if it was an honest mistake. The bar expects proper controls to be in place, and the absence of those controls is itself the problem. We provide the external oversight that prevents these errors from happening.
The other common failure is unbilled work. Professionals get consumed by client matters and let weeks pass without sending invoices. That unbilled time represents real revenue sitting on the table. For firms billing hourly, even a few hours per week of work that never makes it onto an invoice adds up to thousands of dollars in lost income over the course of a year. The work was done. The client expected to pay for it. But nobody sent the bill.
Commingled Funds
Commingled Funds
Using the wrong bank account for a single payment or deposit creates a compliance issue for attorneys and a liability problem for any firm holding client money. We reconcile operating and trust accounts independently every month and flag any transaction that shows up in the wrong place. A mistake caught the same week it happens is a correction. A mistake caught six months later is a crisis.
Misclassified Retainers
Misclassified Retainers
Recording a client retainer as income the moment it is received is one of the most common errors we see. That money is a liability until the work is performed. Booking it as revenue inflates your income, distorts your tax picture, and creates a problem when you owe a refund to a client whose project scope changed. We make sure retainers are tracked correctly from the start.
What Changes
Trust account compliance stops being something that keeps you up at night. Monthly reconciliations catch errors early. Clear client-level reporting shows exactly where every dollar of trust money sits. When the bar asks for documentation or a client questions their balance, you have it ready without scrambling through bank statements and guessing.
Your financial statements start telling you how the firm is actually performing. Revenue reflects work that was completed and collected, not retainers that haven’t been earned yet. Receivables are tracked and followed up on before they age past 60 days. You can see which practice areas or project types generate the best margins and make informed decisions about where to focus the firm’s energy going forward.
Compliance Confidence
Compliance Confidence
Whether it is a state bar audit, a licensing board inquiry, or a lender requesting financials, your records are clean and current. The documentation exists because the process was followed all year long, not because someone assembled it in a rush the week before a deadline. That kind of readiness protects your license and your reputation.
Growth Planning
Growth Planning
Hiring an associate, opening a second office, or investing in new technology requires financial clarity. You have verified reports showing the firm’s actual profitability, cash position, and capacity to take on the added expense. Growth becomes a calculated decision based on numbers you trust rather than a gut feeling about how busy the firm has been lately.
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