Consultancy and advisory firm annual accounts

The short answer

An advisory firm accounts for turnover in proportion to the work performed and not on the invoice date (RJ 270). Hours worked that have not yet been invoiced are a receivable; an advance for work still to come is a liability. For a fixed price you measure progress and take an expected loss immediately. Accrued holiday allowance and leave are a liability.

Updated 30 October 2026

Key facts

When is advisory turnover earned?

Advice is a service. If you can estimate the result of an engagement reliably, you account for the revenue in proportion to the performance delivered (RJ 270, paragraph 115). The invoice date plays no role: income and expenses belong to the financial year in which the work was done, even if the money comes later (art. 2:362(5) DCC).

If that estimate is not possible, you recognise revenue up to the amount of the costs incurred that you can probably recover, and so no profit yet (RJ 270, paragraph 121). An expected loss on a fixed price you take immediately and in full (RJ 221, paragraph 323).

Worked example: three engagements on 31 December

A fictitious advisory BV closes the financial year with three running engagements. The amounts are exclusive of VAT.

• Time-and-materials engagement. In December 120 hours were worked at € 140; the invoice goes out in January. Turnover of the financial year: 120 × € 140 = € 16.800, on the balance sheet as turnover still to be invoiced.
• Fixed price of € 60.000. 400 hours are budgeted, 200 have been worked. Progress is 50% and the turnover earned € 30.000. € 40.000 has already been invoiced, so € 10.000 stands as an amount invoiced in advance under liabilities.
• Fixed price of € 45.000. Due to overrun, the firm now estimates the total costs at € 52.000. The expected loss of € 7.000 goes in its entirety to the current financial year, even though only a third of the work has been done.

Together: € 16.800 receivable, € 10.000 liability and € 7.000 expense.

Work in progress: what goes where?

In bookkeeping it is often called work in progress, but at an advisory firm it is seldom about inventory. Hours whose turnover has already been earned stand at the agreed rate under receivables. Only expenditure on services that you still deliver after the balance sheet date, such as the preparation of a programme that starts in January, you recognise as an asset, provided they will probably lead to revenue (RJ 221, paragraph 312). Describe in the notes how you measure progress (art. 2:384(5) DCC); a micro entity is exempt from that explanation (art. 2:395a(6) DCC).

Staff costs and accruals

Salaries are by far the largest expense at an advisory firm. Outside the micro regime you show wages and social charges as separate items (art. 2:377(3) DCC); the limited profit and loss account of a micro entity mentions only the wages (art. 2:395a(5) DCC). Invoices from hired self-employed people are not wages but external costs. Obligations that arose before the end of the financial year you recognise, even if you pay later (art. 2:384(2) DCC). On 31 December these are:

• holiday allowance: legally at least 8% of wages, accrued up to and including May and paid in June unless otherwise agreed, so usually seven months;
• leave days not yet taken and bonuses to which employees are already entitled;
• the payroll taxes for December, which you remit in January.

Four mistakes advisory firms often make

• Equating turnover with the invoices sent, so that December hours fall in January.
• Including additional work for which the client has not given approval.
• Letting a loss-making fixed price run on because other engagements make up for it.
• Capitalising quotation hours for an engagement that has not yet been won as work in progress.

Sole proprietorship or BV, and which size class?

Independent advisers often work from a sole proprietorship. That is not covered by Title 9 and files nothing with the KVK; see the annual accounts of a self-employed person (zzp'er). An advisory BV does prepare annual accounts and files them. Whether your firm is micro, small or medium-sized depends on balance sheet total, net turnover and number of employees and not on the profession: the limits are at the size criteria, and with the audit requirement check you can see whether an accountant is mandatory.

Jaarrekening.io for an advisory firm

You read the trial balance into Jaarrekening.io as an XAF audit file or as an Excel or CSV file. The hours still to be invoiced, the project balances and the staff accruals you book beforehand in your records, because those estimates remain a judgement of the board. The software sends nothing to the KVK; you file yourself or have your accountant do it.

Sources

• Art. 2:362 DCC: attribution to the financial year
• Art. 2:377 DCC: profit and loss account
• Art. 2:384 DCC: accounting policies
• Art. 2:395a DCC: micro entity
• RJ-Uiting 2020-15: Guideline 270 The profit and loss account
• RJ-Uiting 2020-15: Guideline 221 Projects in progress
• Minimum Wage and Minimum Holiday Allowance Act (Wet minimumloon en minimumvakantiebijslag)

Read more