Accounting & Bookkeeping for
IT Agencies and Consultancies

The question a project business needs its accounts to answer

Most agencies can tell you their revenue. Far fewer can tell you what any single project earned after the time that went into it. That gap is where margin quietly disappears, and it is almost always a bookkeeping decision made at the start rather than an analysis problem at the end. If developer hours, subcontractor invoices and client specific licences are not coded to a project while the work is happening, no report afterwards can recover it.

Project profitability, not just revenue

We set your chart of accounts up so every cost can be traced to the job it belongs to, and your monthly accounts show margin by project rather than one blended number. Agencies that see this for the first time are regularly surprised, because the biggest client is often the least profitable one: the work is discounted, the scope moves, and nobody adds it up until the year ends.

Milestone billing, accrued income and deferred income

A contract billed 30% upfront, 40% on beta and 30% on launch is earned as you deliver, not as you invoice. Work delivered but not yet invoiced belongs in your accounts as accrued income. Money invoiced or received ahead of delivery belongs there as deferred income, which is a liability rather than revenue. Handled properly, your months read sensibly. Handled as cash in and cash out, one month looks excellent and the next looks like a collapse, and your Corporate Tax is wrong in both.

Client deposits and the VAT timing trap

UAE VAT falls due at the earliest of three events: delivery of the service, receipt of payment, or the issue of a tax invoice. A deposit received before any work starts triggers the VAT obligation on its own, in the return covering the period it landed, not the period the project completes. The deposit is still not revenue at that point. Both things are true at once, and that is the part founders find counterintuitive.

Contractors, freelancers and cross border payments

Paying developers in India, Eastern Europe or the Gulf is ordinary for an agency and a common source of messy books. Each payment is recorded at the rate on the transaction date, with the settlement difference running through your profit and loss. You need the supplier invoice rather than a bank line, both to claim the deduction and to hold the position if the FTA asks. Worker classification is a separate question with its own consequences, and it is worth settling deliberately rather than by accident.

Payment gateway settlements

If a client pays AED 1,000 and AED 971 reaches your bank, your books should show AED 1,000 of revenue and AED 29 of processing cost. Recording only the deposit understates your revenue and quietly loses you a deduction. Settlements also arrive days later and in batches covering several sales, which is why the gateway's own settlement report matters more than the bank statement, and why your revenue and your bank movement will never agree at month end.

Getting paid, and seeing it coming

For a project business, cash is lumpy and late payment is the norm rather than the exception. Days sales outstanding tells you how long your clients really take, and an aged receivables report tells you which ones are drifting before they stop replying. Both come out of the bookkeeping rather than a separate exercise.

Subscriptions, if you also sell them

Plenty of agencies carry some recurring revenue: support contracts, hosting, a small product. That income is recognised across the period you deliver it under IFRS 15, not when the customer pays. If subscriptions are the main engine of your business rather than a side line, that is a different accounting problem and a different page.

Do you need an accountant yet, or can you do your own books?

Honest answer: sometimes you do not. Very early on, a founder with reasonable financial literacy and proper cloud accounting software can manage the books alone. That works when all four of these are true: every transaction is in AED, every client is in the UAE, there are no overseas supplier payments, and you are below the AED 375,000 VAT registration threshold. If that is you, do it yourself and spend the money on the product.

The window closes once any one of these applies: you are VAT registered, you have overseas clients or suppliers, you pay contractors abroad, you want to keep the Free Zone 0% Corporate Tax status, you have employees and a payroll obligation, or you are preparing statements for a bank, an investor or a free zone authority. At that point an undetected error stops being theoretical, and the 0% conditions in particular are easy to breach without noticing.

One distinction either way: doing your own books is reasonable, doing them in a spreadsheet is not. Excel has no audit trail, no bank feed and no VAT return, and it breaks the moment project accruals and multi currency enter the picture. Use proper software from day one whether or not you hire anyone.

Audits, and what we do not do ourselves

We are not auditors, so we do not audit your own accounts. The opinion has to come from an independent firm, and that independence is the entire point of an audit.

What we do instead is arrange it. Where your free zone requires audited accounts at renewal, or you are claiming the 0% Corporate Tax rate, we introduce you to a reputable audit firm, prepare the full file they ask for, answer their queries directly, and deal with them on your behalf until the signed report is issued. In practice that means the audit is our project rather than yours, and the amount of it that reaches your desk is usually a signature.

Numbers you can actually use

Beyond compliance, you get monthly management accounts and cash flow reporting, so you know your runway, your margin by project and your receivables position, and can plan on real numbers rather than instinct.

What the service includes

Related guides

• Bookkeeping for Software Agencies: 5 Things Your Accountant Must Do
• 5 Financial Metrics Every UAE IT Consultant Should Track
• Client Deposits and Advance Payments: Do You Owe VAT?
• Payment Gateways in Dubai: What They Do to Your Books and Your VAT
• Contractors vs Employees in the UAE: 5 Cost and Tax Differences
• UAE Client Won't Pay? Escalation Steps Plus the VAT Trap