What makes professional services different
Profit hides in utilisation and pricing
Work in progress and unbilled time need valuing at the year end, or a profitable year looks like a poor one. Retainers create deferred income. Milestone invoicing makes cash lumpy even when the business is profitable.
And whether you trade as a company, a partnership or an LLP changes how profits are taxed and how the people at the top get paid, including the salaried member rules that can turn an LLP member into an employee for tax.
Who we act for
Every kind of professional services business
Consultancies
Project based advisory work where margin depends on scoping and utilisation.
Agencies
Marketing, design and digital agencies with retainers, pass through costs and freelance teams.
Architects and engineers
Long projects, stage payments and work in progress that has to be valued.
Partnerships and LLPs
Profit allocation, partner drawings and individual partner returns.
What we handle
Profitability, structure and compliance
Project and client profitability reporting, so you can see which work is worth repeating. Work in progress and retainer accounting that values unbilled time properly at the year end.
Credit control and payment collection set up, including automated reminders, because late paying clients are the most common cash problem in this sector. Partnership and LLP accounts and returns, including the salaried member rules.
Director and partner remuneration planning, IR35 status reviews for firms placing contractors, VAT on services supplied to overseas clients, and the accountant's reports some professional bodies require.
Packages
- Company Core to Company Premium for companies
- Two partner partnership typically £99 a month
- Virtual Finance Department from £450 a month
- Project reporting included in Premium
Price on margin, not on gut feel
Firms that measure project margin almost always find that a third of their work is barely profitable. Once you can see it by client and by project, repricing is a conversation rather than a guess.
Questions
Frequently asked
How should work in progress be valued?
At the lower of cost and net realisable value, based on the time recorded and the likelihood of billing it. Getting it wrong moves profit between years and can affect partner drawings.
Company or LLP?
A company suits retained profits and reinvestment. An LLP suits profit distribution to individuals with flexible shares. The right answer usually turns on how much profit stays in the business.
Do the salaried member rules affect us?
They can. If an LLP member has no significant influence, a largely fixed reward and little capital at risk, they may be taxed as an employee. We review the three conditions against your agreement.
Can you chase our invoices?
Yes. We set up automated reminders and can send statements on your behalf, then report aged debt to you monthly.
Do you handle overseas clients?
Yes. Services supplied to business customers abroad are usually outside the scope of UK VAT, but the evidence and the invoice wording matter. We set that up correctly.
Speak to someone who knows professional services
Book a free 30 minute call and we will tell you what matters for your business and what it would cost.
Or just pick up the phone
+44 7456 385980info@taxmesh.co.uk
