For service providers, success depends on projects and hours worked. Revenue builds up over several weeks, is billed in installments, and is only settled at the end. To ensure that the monthly report is accurate, we allocate invoices and costs to projects or clients as you wish.
Agencies make purchases on behalf of their clients: advertising budgets with Google, Meta, or LinkedIn, as well as printing, production, and photography. These costs are passed on with or without a markup. Whether an advertising budget counts as your own revenue or as a pass-through item depends on your contracts, and the tax advisor assesses this. We make sure every purchase is matched by a client invoice and no budget goes unbilled. Invoices from major advertising platforms usually come from other EU countries without German VAT; we record them as directed by the tax advisor.
Agencies and IT firms work extensively with freelancers and subcontractors. Their invoices must be complete, and depending on how the work is arranged, there may be a question of whether someone is truly self-employed. Tax advisors or attorneys assess this; we make sure that contracts and invoices match and point out anything unusual. Anyone who regularly purchases design, copywriting, or photography services from self-employed individuals may also be required to pay the artists’ social security contribution. Your tax advisor will determine whether this applies to you; we compile the relevant invoices for the annual filing.
IT and software companies have their own specific patterns: recurring revenue from subscriptions and maintenance contracts, annual licenses paid in advance, payments via Stripe or other services, and cloud costs from providers abroad. We reconcile subscription revenue with payments processed by payment services and report prepayments separately so you can see which months they cover; your tax advisor handles the accruals in the financial statements. Your tax advisor determines whether in-house software should be recognized as an asset in the financial statements; upon request, we track costs and hours separately for each development project to provide the basis for this decision.
Travel expenses, entertainment, hardware, and software subscriptions often account for a large portion of service providers’ costs. These must be recorded in full and with the correct receipts so that the tax advisor does not have to adjust them downward later. For entertainment expenses, the occasion and attendees must be listed on the receipt; for travel, the purpose must be specified; and for software from providers abroad, VAT often has to be treated separately. We follow up on any missing information right away when posting.
For service providers, cash flow is often tighter than revenue figures might suggest. Salaries and freelancers are paid monthly, clients pay with payment terms of 30 days or more, and large projects tie up upfront costs for weeks. We track open items, show you every month who hasn’t paid yet, and, upon request, create a simple cash flow forecast. This way, you can see in advance when funds will be tight and can agree on progress payments or follow up with clients.
