Professional Services ERP, UK

From letter of engagement to fee note in a UK practice

The route I map in British firms runs: inquiry, client due diligence, conflict or independence review, letter of engagement, matter or job opened, work allocated, time recorded by fee earners, draft bill reviewed by the responsible partner, fee note issued, credit control and a closing review of recovery on the job.

Two UK features shape the design. First, onboarding checks are not optional paperwork for regulated firms. Solicitors, accountants and other firms within the anti-money laundering regime must verify clients before acting, so the system should block time recording on a matter until those checks are marked complete. Second, many practices still measure recovery job by job, comparing the fee billed with the value of time recorded, and members expect that figure on every closed job.

I write these steps into process maps per department, because a conveyancing file, a year-end accounts job and a design stage on a building project do not follow the same path, even inside one firm. The maps become the requirements that vendors are asked to demonstrate against.

Lock-up, recovery and what members want to see

Lock-up is the UK practice term most finance directors use for money tied up between doing the work and banking the fee. It has two parts, unbilled WIP and unpaid debtors, and both need aging by partner and client to be useful. In many firms I meet, WIP is only valued at year end, so lock-up during the year is an estimate.

Before configuration, I agree with the members:

• how WIP is valued during the year and at year end, with your accountants setting the policy
• how write-offs are coded, so recovery can be analyzed by reason rather than written off silently
• which time counts as chargeable, and how utilization targets treat training and practice development
• how profit is shown by team and service line before member allocation

Once those rules exist, reports can come from the system rather than a workbook. Partners see the same lock-up figure, aging is visible weekly, and credit control works from one list. Module scope for the sector sits on the professional services ERP page, while ERP for project costing covers job margin mechanics.

VAT on services, overseas clients and disbursements

UK practices with international clients deal with place of supply rules on almost every bill. Advice supplied to a business client overseas is often outside the scope of UK VAT, while the same service to a consumer or a UK client is standard rated, and the reverse charge may apply when you buy services from abroad. Which rule applies is a question for your VAT advisor; the system's job is to apply the agreed treatment from the client record and the service type, not from a fee earner's memory.

Disbursements are a second recurring issue. A true disbursement paid on the client's behalf is treated differently from an expense the firm recharges as part of its own supply. I specify separate cost types for each, so bills show them correctly and the VAT return draws on clean data.

All of this has to reach HMRC through Making Tax Digital compatible software. If the practice system issues bills and the ledger files returns, I map how VAT detail passes between them without rekeying. Broader tax and compliance context across sectors sits on my UK ERP consultant page.

Client money and where specialist software stays

Solicitors holding client money work under rules set by their regulator, and those rules expect a separate client ledger, regular reconciliations and clear records of every movement. I do not recommend moving that ledger into a general ERP. Specialist legal accounting or case management software is built for it, and the safer design leaves it there, with the office ledger recording fees only once they are billed and properly transferred.

Accountancy practices, insolvency practitioners and property-focused firms may also hold money for clients under their own professional rules. Agencies may handle media budgets they pass through to platforms. In every case I separate client funds from firm income in the requirements, define which system is the record of each, and agree a reconciliation routine between them.

The questions I settle early are practical ones: which system shows a partner the client balance on a matter, how a fee paid from client account is marked as settled in debtors, who authorizes transfers, and how the two sets of records are checked at month end. Your regulator and accountants set the rules; I make sure the systems can follow them.

Choosing systems with independent advice

The UK market for practice software is crowded, and many sellers specialize in one profession. A legal suite, an accountancy practice tool, an architecture project system and a general ERP can each make sense for a particular firm. Mixed practices, such as engineering consultancies with a planning team, or accountants with a separate advisory arm, often fit none of them perfectly.

I write requirements around your real matters and jobs and test each shortlisted option against them: a fixed-fee job that overruns, an overseas client with no VAT, a disbursement-heavy matter and a member who wants profitability by team. Where engagement-based firms such as consultancies or agencies choose a general platform, the product detail is on my Zoho Projects UK and Odoo Projects UK pages, and consultancies may also find the consulting ERP page useful.

Delivery is remote, with workshops inside the UK working day and recorded walkthroughs for fee earners who cannot leave client work. More on remote delivery for British clients is in the UK overview.