Accounting and Tax Support for Professional Service Firms
Connect client profitability, receivables, payroll, and owner tax planning. Monthly accounting and tax preparation coordinated around how your firm operates.
A guide by Taxstra Tax & Accounting · CPA-led tax strategy for business owners
Accounting built around how your firm earns and collects
Professional services accounting should connect client and project results, receivables, payroll, and owner activity with business tax preparation and planning. Taxstra can coordinate these services for established firms, including firms that retain an internal bookkeeper. Your written engagement defines each responsibility.
- Revenue and margin by engagement
- Agree on client and project codes, the treatment of retainers, and the allocation of direct labor and subcontractor costs. Review the source time and billing data before relying on profitability reports. Firm-wide profit can hide projects with late collections or costs that were never assigned.
- Collections and payroll timing
- Reconcile invoices, deposits, credits, and receivable aging. Assign collection follow-up to someone in the firm and distinguish overdue invoices from disputed work. Use payroll and upcoming commitments to frame cash conversations; add a forecast when a hiring or expansion decision needs one.
- Owner activity and tax coordination
- Keep owner compensation, reimbursements, contributions, and distributions separately identified. Agree on the business and owner returns covered and the planning cadence. Give the accounting and tax teams the same current information when partners change, new states enter the picture, or compensation is reconsidered.
- Work alongside your staff
- Your office manager can keep billing and client relationships while Taxstra handles the agreed monthly close, financial reporting, and review. The proposal names preparation, review, approvals, and exceptions. Historical cleanup and additional advisory projects are scoped separately.
For a solo practice with simpler needs, a lighter bookkeeping engagement may be appropriate. There is no requirement to add CFO services to accounting and tax work.
What changes as a firm adds people, projects, and owners?
The same revenue can require different work
A firm with recurring monthly retainers has different reporting needs from one with milestone invoices, several delivery teams, and project subcontractors. Scope the billing workflow, source time records, expense allocation, and review responsibilities before selecting a reporting package.
A profitable project can still tie up cash
Illustrative situation: a project shows a positive margin, but the final invoice remains unpaid while payroll is due. The accounting discussion should distinguish earned revenue, collection timing, and cash commitments. A collection owner and a cash forecast answer different questions; a single profit figure cannot replace either.
Agree on the recurring relationship before onboarding
- List the scope. Identify entities, accounting systems, client/project reporting, payroll coordination, and business and owner tax work. Keep annual preparation distinct from ongoing planning.
- Separate the starting work. Identify historical cleanup, missing support, and any system changes. Set a first-close date based on records and responsibilities rather than a universal turnaround promise.
- Set the communication cadence. Name the contact for routine questions, the reviewer, meeting participants, and how a new project or owner change reaches the planning team.
- Define additional work. New entities, special models, transactions, or expanded reporting may change scope. Specify the approval process before that work begins.
Taxstra is led by Bryan Martin, CPA, MBA, and serves clients nationwide. Our bookkeeping, preparation, and planning services can be scoped together or separately. See the accounting cost and scope guide before comparing proposals.
Professional services accounting questions
What accounting services does an established professional service firm need?
Start with reconciled monthly accounts, financial statements, payroll and owner-activity accounting, and receivable reporting. Add client or project profitability when source data supports it. Business tax preparation and owner planning can be coordinated in the same engagement, with the entities, returns, cadence, and responsibilities listed in the proposal.
Can we keep our internal bookkeeper or office manager?
Yes. Your team can retain billing, transaction preparation, and client contact while Taxstra performs the agreed close and review work. Assign who prepares, reviews, approves, and resolves exceptions. Management retains operating and payment decisions.
Are owner tax returns included with business accounting?
Only when the written engagement includes them. Name each business entity, state, and owner return, along with the records needed from other investments or businesses. Separate preparation from planning and implementation responsibilities.
Do we need a fractional CFO to combine accounting and tax?
No. Monthly accounting, tax preparation, and planning can form the recurring relationship. Add CFO services when you need forecasting or decision support for hiring, pricing, financing, or expansion.
What determines the monthly accounting fee?
The quote depends on account and transaction volume, entities, payroll, billing systems, project reporting, review needs, and planning scope. Historical cleanup and special projects are identified separately. We discuss scope and fit before proposing an engagement.
How do we switch accounting firms?
After agreeing on the engagement, inventory the entities, systems, open filings, existing reports, and access rights. Coordinate record transfer with the prior firm, establish opening balances and unresolved items, and agree on the first close and communication schedule. Keep deadlines assigned during the handoff.
Discuss your accounting and tax needs
Book a free 30-minute consultation with our team about your business, services, fit, and next steps. Professional document reviews, calculations, tax advice, and action plans require a paid engagement.
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