Accounting for Professional
Services Firms
Consulting firms, law practices, marketing agencies, and IT services companies all share the same core challenge: your people are your product. We help you maximize the profitability of every billable hour while minimizing your tax burden.
INDUSTRY CHALLENGES
Financial Pain Points for
Professional Services
Project Profitability
Fixed-fee projects can become money losers if scope creep goes untracked. Without real-time visibility into hours consumed versus budget remaining, you discover profitability problems only after the project closes and the damage is done.
Utilization Tracking
Billable utilization is the single most important metric for professional services profitability. A few percentage points of improvement across your team can mean hundreds of thousands in additional revenue, but you cannot improve what you do not measure.
Deferred Revenue & Recognition
Retainers, prepaid engagements, and milestone-based billing create complex revenue recognition requirements under ASC 606. Recognizing revenue too early overstates performance; too late understates it. Both create tax and reporting problems.
S-Corp Optimization
Professional services owners frequently operate as S-Corps but struggle to set the right reasonable salary. Too high and you overpay FICA taxes. Too low and you risk IRS reclassification. Getting this balance right saves most owners $10,000 to $30,000 annually.
HOW WE HELP
Services Built for
Professional Services Firms
Project Profitability Analysis
Real-time dashboards that show profit margins on every active project, broken down by client, service line, and team member. Spot scope creep before it erodes margins and make informed decisions about pricing future engagements.
Revenue Recognition
Proper revenue recognition that handles retainers, milestone billing, time-and-materials engagements, and prepaid contracts under ASC 606 standards. Clean deferred revenue tracking that prevents audit issues and keeps your financials accurate.
Partner Distribution Planning
We model partner compensation structures that balance salary, distributions, and guaranteed payments to minimize overall tax liability. For multi-partner firms, we help design equitable distribution waterfalls that account for origination, management, and billing contributions.
Retirement Optimization
Professional services owners are uniquely positioned to benefit from defined benefit plans, cash balance plans, and mega backdoor Roth strategies. We design retirement contributions that shelter six figures annually from taxes while building long-term wealth.
S-Corp Salary Optimization
We determine the optimal reasonable salary for your S-Corp that passes IRS scrutiny while maximizing your tax savings on distributions. Quarterly adjustments ensure your salary stays optimized as your business income fluctuates throughout the year.
KPI Dashboards
Custom reporting dashboards that track the metrics that matter: utilization rates, realization rates, average billing rate, pipeline value, and revenue per employee. Data-driven insights that help you make better decisions about hiring, pricing, and resource allocation.
WHY TODAY CFO
Why Professional Services Firms
Choose Today CFO
We Understand Your Model
We know that a professional services business lives and dies by utilization and realization rates. Our reporting is built around the metrics that actually drive your profitability -- not generic financial statements that miss the point.
Significant Tax Savings
Professional services owners typically have the highest potential for tax savings through S-Corp optimization, retirement plan strategies, and QBI deduction planning. We routinely save clients $20,000 to $60,000 or more per year in taxes.
Year-Round Partnership
We are not a once-a-year tax preparer. Our monthly strategy calls, quarterly tax projections, and real-time dashboards mean you always know your financial position and can make informed decisions about hiring, pricing, and growth.
See How Much Your Firm Could Save
With Proactive Tax Planning
Our calculator gives you a personalized estimate based on your revenue, entity type, and business complexity. Professional services owners consistently see the highest savings from our proactive strategies. Find out what yours could be in under 2 minutes.
Calculate Your Savings