IT AND OTHER SERVICES
The service business is special because its main product is not a thing, but an intangible value that the customer receives when using the service.
Homepage /
ACCOUNTING FOR IT AND OTHER SERVICE COMPANIES
Unlike production or trade, services are often not retained, not transported, and are created and consumed at the same time. These characteristics make service businesses characterised by a specific operational logic, the importance of customer service and business management features.
Accounting in the service sector has a number of unique features that distinguish it from accounting in other business areas. As the main ‘product’ of this sector is intangible (service), accounting here is simpler in some respects, but requires considerable attention to the recognition of services, costing, payroll and other aspects.
Revenue accounting
In service activities, revenue is generally recognised when the service is actually rendered (accrual basis). If the service takes longer to provide (e.g. projects, consultancy), revenue may be spread over the period. Our specialists advise clients and provide guidance on how to correctly account for and measure revenue. In the IT field, income is also generated from recurring (subscription) services (system maintenance, hosting services, licence rentals, etc.), in which case the accountant takes care of the periodic invoicing and the proportional recognition of income.
Payroll accounting
As employees are a critical component of service delivery in service businesses, our accountants advise on recruitment, payroll and travel accounting, and the calculation and taxation of employment benefits.
Detailed project accounting
As in the service sector, clients very often separate activities by project in order to assess the profitability of individual projects, our accountants help clients to organise detailed accounting. Our accountants advise our clients and create a cost centre structure, which allows our clients to easily and comprehensively account for their costs by project (object).
VAT accounting
Accountants keep correct records of vehicle depreciation, which allows them to assess the real value of assets and plan the need for new investments. Expenditure on vehicle repairs is also controlled.
Accounting for fixed assets and costs
In the IT business, it is very important to distinguish between costs classified as operating expenses and those classified as fixed assets. Accountants advise clients and help them to make the correct allocation, taking into account the duration and nature of the use of e.g. purchased licences or cloud solutions.
Accounting for payments to natural persons
In addition to hiring employees, service companies, including IT companies, very often work with natural persons on a self-employed basis. Accountants help clients to assess whether the cooperation has the characteristics of an employment relationship and whether the business relationship with these suppliers has been properly formalised. Our specialists provide assistance in drafting service contracts and advise on taxation issues.