Professional Services Guide



Accounting Service

Organizations that specialize in accounting services may be in the business of tax preparation, bookkeeping, auditing, and other forms of financial planning and compliance.


A project management methodology characterized by building products that customers really want, using short cycles of work that allow for rapid production and constant revision if necessary.


Basic Service Contract

A basic service contract is an agreement between a client and vendor that outlines details concerning what work will be performed, length of service, and the payment structure.

Billable Work / Billable Hours

In professional services, billable work describes any task that can be billed to a client. Billable hours are the amount of time spent on these tasks. In this case, when charging a client on an hourly fee structure, you would bill them based on the number of hours spent completing tasks — but only on relevant and eligible work. 

Billing Models

Billing models are fee structures used to charge clients and customers. There many types of billing models that a business can choose based on the type of service they provide and other factors. Fixed fee and hourly billing are two examples of widely used billing models.

Business Resource Planning

Business resource planning is a process used to manage the different needs and requirements of an enterprise. Oftentimes, ERP software can be used for business resource planning in order to carry out important functions within the organization like resource and supply chain management.


Capacity Planning

Capacity planning is an essential part of project management. It is a process of assessing available work capacity versus the amount of work needed to complete a project.

Capacity Utilization

Capacity utilization is the relationship between possible output and actual output. For example, it may be possible for an attorney to complete 30 hours of billable work in a week but, if they only do 15 hours, they are at 50% capacity utilization. 

The formula to calculate capacity utilization is maximum output divided by maximum possible output.

Client Centric Approach

A client-centric approach is a way of business that focuses the customer’s business needs as a strategy for growth. With a client-centric approach, businesses can tailor experiences and services that build loyalty and trust between the company and the customer.

Client Management

Client management describes the process of effectively addressing the needs of a client or customer base. There is no one action that can be seen as client management. Instead, it is an ongoing process where businesses cultivate a relationship and sense of loyalty through customer service. 

Client Retention

Client retention means keeping a client on board with your organization, product, or service. A client retention rate is simply the percentage of existing clients who choose to continue retaining your services. Client retention is important for many businesses because it is often more expensive to bring on a new client than it is to keep an existing one.

Client Services

Client services connect the customer to the project team or organization. A client services manager may act as a liaison or go-between, communicating client concerns, preparing reports and updates, and sharing client concerns with the project teams. 

Consulting Agreement

A consulting agreement is a document that details the terms of a work arrangement between two entities — an independent contractor and a client. This agreement should include details surrounding the scope of work, compensation etc. 

Consulting Retainer Contract

A consulting retainer contract allows a consultant to bill for services carried out over a long-term basis. Unlike consulting on one specific project, a consultant may opt for a retainer contract because it provides steady, reliable income. The client may also prefer it because they have continued access to the consultant’s expertise. 

Contingency Planning

Contingency planning focuses on creating processes and systems that address business risks or disruption. A good contingency plan should detail any major threats to business continuity or project completion. It should also outline a response plan. 

Contingency Time

Contingency time refers to a buffer that is added to a project schedule. This could be a buffer of two weeks or even two months (or more!) depending on the project. In a project, any number of issues may arise. Adding in contingency time takes into account any risk factors that may delay, or even derail, a project.

Critical Success Factors

Critical success factors are key milestones or objectives a project needs to achieve in order to be considered a success. An awareness and understanding of the project’s CSFs often help to align team focus and prioritie

Collaborative Work Management (CWM) Software

Collaborative work management software is software that facilitates the cooperation of teams and individuals in a professional capacity. Key features of collaborative work management software may include task management, resource management, and file storage tools. 

Client Relationship Management

Client relationship management, also known as client resource management, is the process of managing customer interactions and information for the purpose of service optimization and client retention. CRM software manages this data so that it may be leveraged in sales and customer interactions.


Days Sales Outstanding (DSO)

Day sales outstanding refers to the average number of days it takes for a business to collect payment for sales made on credit.

Demand and Capacity

Demand and capacity are ways of measuring and managing what is needed/required against the resources available to meet those needs. For instance, high demand and low capacity can lead to bottlenecks in production because, although there is interest in a product or service, there is little capacity or resource to meet up with demand. 

Demand Management

Demand management is a process that enables businesses to analyze and anticipate customer demand and adjust capacity as needed.


Employee Utilization

Employee utilization is one way of measuring a worker’s productivity. Usually expressed as a percentage, employee utilization is calculated by dividing an employee’s total billable hours by the number of hours they worked in a certain time period — say a week or a month. Low employee utilization can mean an employee is idle or spending an excessive amount of time doing things like admin, or other repeatable tasks. Very high employee utilization, on the other hand, can mean an employee is overworked or at risk of becoming burned out. 

ERP Software

ERP (Enterprise Resource Planning) software is software designed to help large organizations manage the many moving parts of their business. ERP can be very pricey but its main features usually include supply chain management, business intelligence, and sales management.


Firm Fixed Price (FFP)

A firm-fixed-price contract is a contract where the cost of the product or service does not fluctuate based on time spent or materials costs. Because of this, cost estimates for a firm-fixed-price contract must be made very carefully. 


High Visibility Project

A high visibility project is any initiative within an organization that is of great importance and one which oftentimes attracts the attention of executives or other key company figures. It may be a high dollar project, or it may simply be a foray into a new sector. 

Human Resource Planning

Human resource planning is a process where organizations forecast the staffing needs of their organization. These needs are then addressed by maintaining a talent pool of well-qualified professionals.


Invoice Processing

Invoice processing involves the intake, management, and payment of invoices submitted by suppliers. Many businesses use software that manages this process electronically.



In project management, a milestone is an important event or marker in the initiative’s life cycle that signals a turning point or significant achievement. 

Milestone Billing

Milestone billing is a fee structure that triggers payment once a certain point in the project has been reached. A project may include two or three significant milestones. In this case, payment may be spread across said milestones. 


Not To Exceed (NTE)

A not to exceed clause in a contract typically stipulates that the amount a vendor charges cannot exceed a certain amount. This can be tricky for the vendor in cases where the cost of materials fluctuates or the length of the project is unknown. 


Work that is non-billable cannot be charged to the client. A client should only be billed for work pertaining to their project or case. For instance, a lawyer cannot bill client A for time spent drawing up contracts or arguing in court for client B.


On Time and On Budget

On-time and on-budget project delivery typically indicates that a project has been well managed and executed. It means that the project has not missed its deadline or gone over the agreed-upon budget. 

Operating Profit Percentage Formula

To calculate operating profit percentage (or operating profit margin), use the following formula: 

Operating profit divided by net sales multiplied by 100.

Operational Efficiency Formula

Operational efficiency is calculated by using the operational efficiency formula. The operational efficiency formula is operating costs divided by revenue. 


Planning Software

Planning software helps businesses organize different parts of their strategy and task priorities. You can use planning software to plan projects, onboard new hires, manage day-to-day operations, or even for personal everyday tasks. 

Project Definition

Project definition lays out the scope, objectives, stakeholders and deliverables of a project. It is an essential piece of documentation that can be referred back to if details of the project are unclear at any point during the life cycle.

Pricing Model

A pricing model is a way of determining the value of a product or service. Popular pricing models include value-based pricing, cost based pricing, fixed pricing, and time and expense pricing. 

Price Planning Process

Price planning is a strategic approach to arriving at the price of a product or service. The price planning process is six steps long. These six steps are 1) set pricing objectives, 2) estimate demand, 3) determine costs, 4) examine the pricing environment, 5) chose a pricing strategy, and 6) develop pricing tactics. 

Productivity Monitoring Software

Productivity monitoring software is software that allows managers and project leaders to keep track of when and how their teams work. Productivity monitoring software can have features like time tracking and other activity monitoring tools. 

Professional Service Agreement

A professional service agreement is an agreement between a client and a vendor that outlines the terms of a business partnership. It may detail the scope of work, fees/compensation, and length of engagement.

Profit Margin

Profit margin expresses the profitability of a project or business. Gross profit, operating profit, and net profit are all different ways to calculate profit margins.

Program Status Report

A program status report provides an overview of multiple projects, often within the same portfolio. These reports are presented at a high level and contain details about budget, scheduling, and general project progress. 

Project Assumptions and Constraints

Project assumptions are things that are generally assumed to be true in a project setting (i.e. that there will be enough equipment to complete the project). Meanwhile, constraints are essentially a project’s limitations. For example, no project has unlimited budget or resources. So budget, resource, and timeline are often constraints.

Project Contingency Plan

A contingency plan in project management addresses potential risks that may arise over the course of an initiative. It is a backup plan that outlines a strategy and course of action in the event that things do not go as they should.

Project Management Status

Project management status conveys key details about a project’s progress. It gives insights into its overall health — detailing whether it is on track, on budget, subject to a change order etc. 

Project Profitability Calculation

Project profitability is typically calculated by using the profitability index formula. The formula for calculating the profitability index is:  

Profitability index = Present value of future cash flows/initial project investment.

Project Profitability Index

The project profitability index helps businesses assess the potential value or profitability of a project. Teams often compete for resources within an organization and the project profitability can be an indicator of which projects are worth pursuing. 

Project Report

A project status report is a document that details relevant information regarding the status of an initiative or assignment. It often reiterates information like project manager, client, and stakeholders. It should then detail key project health indicators like budget spend, timeline, and next steps.

PSA Software

Professional services automation software refers to a category of software that uses automation to increase visibility, and eliminate inefficiencies. If a company finds that its workers are spending a huge amount of time doing admin, it may look to PSA software to automate time-inefficient activities, help manage resources, and assist with time tracking.

Purchase and Sale Agreement

A purchase and sale agreement is a contract between a vendor and client where the vendor agrees to sell a product or service and the client agrees to buy it. It serves as documentation of the sale. Purchase and sale agreements are primarily used in real estate transactions. 

Productive Hours Calculation

A productive hours calculation is used to determine the amount of productive hours an employee has in a set period of time — often over the period of a year. The number can be arrived at by taking the amount of days in a year (365) and subtracting weekends, holidays, vacation time, and any other planned absences. Then multiply by this number by the typical amount of workday hours — 8 hours is average for full-time workers.


Receipt For Services Rendered

A receipt for services rendered acts as documentation of work that has been completed. It is typically issued by the vendor and can be kept for the client’s own records. 

Resource Forecasting

Resource forecasting is the process of determining what resources an organization will need in the future based on its business goals and planned projects. Resource forecasting often uses historical data to inform resource requirements. 

Resource Management

Resource management is the process of leveraging a business's available time, money, equipment and personnel to meet project and organizational goals. Because these types of resources are rarely unlimited, it is important to manage them efficiently for the best outcome.  

Retainer Model

A retainer model is a type of fee structure where the services of a vendor are engaged for an ongoing period of time. This is different to a fixed price structure where a customer pays an agreed upon fee for a limited or one-off project/assignment. 

Resource Capacity Management

Resource capacity management is the assessment of resource levels as it pertains to the available time and work needed to complete a project.


Service Agreement

A service agreement is a contract that establishes the terms of a business transaction or relationship. For instance, an IT consultant and their client would likely sign a service agreement that lays out the terms of service, length of service, fee, and privacy declaration. 

Service Pricing Model

A service pricing model is essentially a way of charging customers for the services offered. A vendor may charge for their services based on a retainer agreement, or they may choose to charge based on a bundle of services most suited to a customer’s needs. 

Service Resource Planning

Service resource planning is the process of managing a professional service organization’s available resources. Professional service firms often need to plan these resources using software options that offer increased project visibility, up-to-date details around employee availability, and more.

Service Structures

Service structures are ways of classifying services within your organization. This can help teams within a professional services firm become more accountable and improve the level and quality of services afforded to clients.

Service Capacity

Service capacity management is the concept of maintaining a level of service without sacrificing quality. For example, although your organization may have enough people to juggle 10 major projects at a time, it may be the case that they can only take on 7 projects at max without sacrificing quality.


Time and Materials Agreement (T&M Agreement)

A time and materials agreement is a contract where a vendor is reimbursed for things like supplies and other equipment — as well as a rate for their time. It is used most often when the price of materials is unclear at the time, or may fluctuate. 

Time Tracking

Time tracking is crucial for companies who rely on an hourly billing structure to charge clients for services or work completed. Time tracking can also be used to monitor employee productivity levels.

Talent Optimization

Talent optimization is the process of ensuring that the right personnel is recruited and assigned within your organization in a way that aligns with broader business goals and strategy.

Team Capacity Planning

Team capacity planning is the process of determining the production capacity required to complete a project. 

Team Status Report

A team status report is an update provided to clients, stakeholders, and members of a project team. It outlines progress, milestones, and next steps for an initiative. It can also help relevant parties understand the health of a project and forge a path moving forward.



Utilization is a way of expressing (as a percentage) the amount of time spent working on billable or valuable tasks, versus the time available. For instance, if Simon works 40 hours a week and 29 of those hours are spent on billable tasks, Simon’s utilization rate is 72%. 


Visibility (Project)

In project management, the term visibility refers to the availability of accurate and up-to-date information that can provide the crucial context needed for project success.