Accounting for Fresno Professional Service Firms
Professional Services
Law Firms, Consultants & Agencies in Fresno, CA
Professional service firms have no inventory and no storefront. Your balance sheet is people, time, and receivables. That makes the accounting look simple and the tax planning genuinely hard — and it means the general bookkeeper who handles the shop down the street is the wrong fit.
Harlan Willow Accounting Group works with law firms, consultants, agencies, engineers, and architects across Fresno, Clovis, and the Central Valley. We combine monthly bookkeeping and accounting with year-round business tax planning, so the decisions that change your tax bill get made while they still can.
The QBI Problem Nobody Warns Professional Firms About
Here is the issue most Fresno firm owners hit around year three of doing well.
The 20% qualified business income deduction is one of the largest breaks available to pass-through businesses. But law, consulting, and most professional services are classified as specified service trades or businesses. For an SSTB, the deduction phases out entirely once taxable income clears the threshold.
For 2025 that threshold is $394,600 for joint filers and $197,300 for everyone else, with the deduction gone completely $100,000 above each figure — $494,600 joint, $247,300 otherwise. Above that line an SSTB gets no QBI deduction at all. Not reduced. Zero.
A profitable two-partner firm crosses that line without anyone mentioning it. What you do about it — retirement plan design, entity structure, reasonable compensation, and the timing of income and expenses — has to be decided during the year, not in April. That is the heart of business tax planning, and it is separate from simply filing the return.
- Operating & Trust Account Reconciliations: Every account tied to source each month, with trust accounts reconciled separately and to a higher standard.
- Monthly Financial Reporting: Profit & loss, balance sheet, and cash flow, delivered on a set schedule with a plain-English summary of what moved.
- Work in Process & Unbilled Time: The number that tells you whether you are actually profitable or just busy.
- Realization & Collection Tracking: Billed versus collected, and exactly where the leakage is happening.
- Partner & Owner Draw Tracking: Draws tracked against distributive share so nobody is surprised at year end.
- CPA Tax Strategy Check-Ins: Entity, compensation, and retirement plan decisions made during the year, while they still change the outcome.
This page is general information, not advice for your specific situation. Monthly engagements do not include payroll processing, client invoicing, or bill pay execution — we reconcile and report on all three and coordinate with whoever runs them.
TRUST ACCOUNTING
Trust Accounting for Fresno Law Firms
Three-Way Reconciliation
Every month we tie the trust bank statement, the trust general ledger, and the individual client ledgers to one another. This is the reconciliation that proves your compliance, and the one most often missing.
Client Ledger Maintenance
Every matter carries its own ledger, so any client balance is provable on demand rather than reconstructed under pressure.
Earned vs. Unearned Fees
Clean separation between operating money and trust money, with earned fees transferred only when they are actually earned. California Rule 1.15 leaves no room for improvisation here.
CTAPP-Ready Documentation
The State Bar requires annual registration of every trust account plus a compliance self-assessment. We keep records that support that certification instead of scrambling for it.
FREQUENTLY ASKED QUESTIONS
Professional Services Accounting (Fresno, CA)
Do you handle attorney trust accounting and IOLTA?
Yes. Client trust accounting is one of the main reasons firms come to us. California Rule of Professional Conduct 1.15 requires client funds to sit in clearly identifiable trust accounts, and the State Bar’s Client Trust Account Protection Program requires annual registration of every trust account plus a compliance self-assessment. We handle the accounting that supports it.
What is a three-way reconciliation and why does it matter?
It ties three things to each other every month: the trust bank statement, the trust account balance in your general ledger, and the sum of the individual client ledgers. All three must agree. If they do not, money has moved that should not have. It is the single most important control in trust accounting and the one most commonly skipped by general bookkeepers.
Why does the QBI deduction disappear for my firm?
Law and consulting are specified service trades or businesses. For 2025, the qualified business income deduction begins phasing out at $394,600 of taxable income for joint filers ($197,300 otherwise) and is gone entirely $100,000 above each figure. Above that line an SSTB receives no QBI deduction. Most profitable multi-partner firms are above it, which is why planning shifts to retirement plan design and compensation structure.
How should partners take money out of the firm?
It depends on your entity, income level, retirement plan design, and how many owners you have. The split between salary and distribution affects payroll tax, plan contribution capacity, and the QBI calculation all at once. There is no universal formula worth copying — it is a conversation to have with a CPA before the year closes.
Do you work with consultants and agencies, or only law firms?
Both. Law firms have the trust accounting requirement, which is why they feature heavily here, but consultants, agencies, engineers, architects, and other professional practices share the same underlying economics: people and time instead of inventory, and owners in high tax brackets.
Can you track work in process and realization?
Yes. WIP and unbilled time tell you whether the firm is actually profitable or simply busy, and realization tells you how much of what you bill you actually collect. We report both monthly alongside the standard financial statements.
Which software do you support?
QuickBooks Online is our standard platform, and we also work in QuickBooks Desktop and Xero. For trust accounting we can work alongside practice management systems such as Clio. If you are on something else, we will tell you honestly whether migrating is worth it.
What does this cost?
Flat monthly pricing based on your transaction volume, number of accounts, and whether you need trust accounting and CPA advisory included. No hourly billing, and asking a question does not start a clock. We will give you a number after a short conversation about your firm.
GET IN TOUCH
Let’s Chat About How We Can Help You
We are here to simplify your numbers, keep your trust accounting clean, and make sure the tax planning happens while it can still change the outcome. Use the form to reach out, or skip the inbox and schedule directly with us.