Accountants for Professional Services Firms in Hertfordshire & North London
Professional services firms — law firms, management consultancies, HR consultancies, engineering firms, architects' practices, and similar businesses — share a set of financial characteristics that require specialist accounting knowledge. Revenue recognition on long-term projects, WIP (work-in-progress) management, partner equity structures, IR35 exposure for contractor resources, and the management of professional indemnity insurance costs all require careful handling.
CoreAcc works with a wide range of professional services businesses across Hertfordshire and North London, providing accounting, tax, and strategic financial support tailored to the specific demands of your sector.
Work in Progress (WIP) and Revenue Recognition
Accurately valuing and reporting work-in-progress is one of the most important — and contentious — accounting judgements for professional services firms. Billing on fixed-fee projects, time-and-materials engagements, and retainer arrangements all have different revenue recognition implications under UK GAAP. We ensure your management and statutory accounts correctly reflect the economic substance of your work, giving you reliable profitability data for decision-making.
Partnership & LLP Accounting
Many professional services firms operate as partnerships or limited liability partnerships (LLPs) rather than limited companies. These structures have their own specific accounting and tax rules:
- ✓Allocation of profit and loss between partners or members according to the partnership deed or members' agreement
- ✓Individual partner self-assessment tax returns, including payments on account planning
- ✓Salaried member rules for LLPs — HMRC may seek to reclassify certain LLP members as employees, with National Insurance implications
- ✓Capital account management and partner retirement provisions
- ✓Conversion from partnership to LLP or limited company — modelling the tax implications
Management Accounts & KPI Reporting for Consultancies
For consultancy and professional services businesses, the key financial metrics are different to a product business. We focus on:
- ✓Fee earner utilisation rates and revenue per fee earner
- ✓Realisations rates — billed vs. WIP
- ✓Lock-up days — the time between doing the work and collecting cash
- ✓Overhead as a percentage of revenue
- ✓Project profitability analysis by client, project, and service line
Our management accounts are designed around your specific business model and KPIs — not a generic template.
IR35 Compliance for Firms Using Contractors
Many professional services businesses supplement their permanent teams with contractors engaged through personal service companies (PSCs). Since April 2021, the responsibility for IR35 assessment sits with the engaging company (if medium or large), and the risks of getting it wrong are significant. We advise on Status Determination Statements (SDSs), contractor engagement frameworks, and IR35 risk mitigation.
Who We Work With
- ✓Management and strategy consultancies
- ✓Law firms and solicitors' practices
- ✓HR and recruitment consultancies
- ✓Engineering and environmental consultancies
- ✓Architects and town planners
- ✓PR, communications, and public affairs agencies
- ✓Training and coaching businesses
Frequently Asked Questions
How should we handle deferred income on fixed-fee retainers?
Under UK GAAP, income should be recognised as the performance obligations are satisfied. For a fixed-fee retainer, this typically means recognising income on a straight-line basis over the period of the retainer — not when payment is received. Amounts received in advance that have not yet been earned should be treated as deferred income on the balance sheet. We set up your bookkeeping to handle this correctly from the outset.
Do the salaried member rules apply to our LLP?
The salaried member rules apply where an LLP member meets three conditions: their disguised salary (fixed remuneration) is at least 80% of their expected profit share; they have no significant influence over the affairs of the LLP; and their capital contribution is less than 25% of their disguised salary. If these conditions are met, the member is treated as an employee for tax purposes, and the LLP must operate PAYE and NICs. We assess each member's position individually.
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