Professional Services
Accounting for Professional Services Firms
Professional services firms run on billable time, partner draws, and trust accounting, not inventory turns or COGS. Your accounting needs to reflect that. Rubric Financial supports law firms, consulting practices, marketing and design agencies, and other professional partnerships across the Bay Area and the United States. Most engagements run on a fixed monthly retainer with the same partner you start with, no rotating team, no per-question billing.
What We See Most
Common challenges in this category
The accounting and tax issues we run into repeatedly with professional services clients.
- Partner compensation, draws, and capital accounts that need consistent tracking, not just net income to a single owner
- WIP (work in process) and unbilled receivables that distort cash-basis books
- Trust accounting and IOLTA reconciliation for law firms with strict bar-association requirements
- Project profitability across clients and matters when revenue is bundled or fixed-fee
- Multi-state nexus when partners or staff work remotely across state lines
- Quarterly K-1 distributions and partner tax estimates that need predictable cadence
How We Help
Services that matter most for professional services
Accounting
Accrual-basis monthly close with WIP and unbilled receivables tracked properly, so partner draws are paid from real income, not cash timing.
Learn morePayroll
Multi-state W-2 staff and 1099 contractors handled cleanly, with quarterly tax filings and year-end forms on schedule.
Learn moreBusiness Tax & CPA
Partnership (1065) and S-corp (1120-S) returns, K-1 preparation, and quarterly partner estimates, coordinated with personal returns.
Learn morePersonal Tax
Partner personal returns with K-1s, multi-state filings, and equity / partnership-interest planning under one engagement.
Learn moreFractional CFO
Pricing analysis, partner compensation modeling, lateral / merger evaluation, and lender / banking management.
Learn moreFAQ
Common questions
- Do you handle IOLTA / trust accounting for law firms?
- Yes. We reconcile trust accounts monthly, prepare client-ledger reconciliations, and keep documentation that meets state bar requirements.
- How do you handle partner draws and capital accounts?
- We track partner capital separately from operating cash and reconcile capital accounts monthly. Draws, contributions, and tax distributions are reflected accurately on the K-1 and on each partner's basis schedule.
- Can you support a multi-state remote partner team?
- Yes. We register your partnership in additional states as needed, run multi-state payroll for staff, and coordinate state withholding and non-resident filings for partners.
- Do you do project profitability or matter-level reporting?
- Yes, when the underlying time and billing data is structured for it. We work with Clio, MyCase, and the standard agency stacks to produce per-matter or per-client profitability.
Related industries
Keep reading
W-2
IRS form reporting wages, tips, and tax withholding for employees.
GlossarySchedule K-1
IRS form reporting a partner's, S-corp shareholder's, or trust beneficiary's share of income, deductions, and credits.
GlossaryPassthrough Entity
A business entity that doesn't pay federal income tax; income passes through to the owners.
GlossaryS-Corporation (S-corp)
A passthrough entity that allows owner-employees to split income between salary (subject to FICA) and distribution (not).
GuideS-corp vs. LLC for Small Business Owners
When the S-corp election actually saves money for an LLC owner, and when it costs more in headaches than it pays in taxes.
GuideK-1 Income: What It Is and How to File It
If you're a partner, S-corp shareholder, or LLC member, you'll get a K-1. Here's how to read it and where each number lands on your 1040.
For professional services owners specifically
See how we work with owners in your industry, pains we solve, plan we'd propose, calculators and guides scoped to your specific situation.
Run a professional services business?
Tell us about it. Response within one business day from a partner.