California AB5 worker classification
The contractor-classification detail behind your practice books — books-only, educational.
AB5 classificationCalifornia · Professional Services
California professional-services accounting that knows which engagements pay.
California consultancies and advisory practices live and die on utilization and realization. We track project profitability, structure partner draws, and surface AB5 contractor exposure — prepared by a senior bookkeeper who works in your software, or by a signed specialist practice when your books need one.
Monthly bookkeeping: $500–$2,500+ a monthWhat sets the price
If your file needs our paid diagnostic first, its fee is credited in full against the cleanup. Either way, you get a fixed fee in writing before any work starts.
State rule
California rule: under the ABC test, a worker is an employee, not an independent contractor, unless the hiring firm shows all three: the worker is free from its control, does work outside the usual course of its business, and is customarily engaged in an independent trade or business. Source: ABC test, California Labor & Workforce Development Agency.
§ The short version
California professional-services accounting from TechBrot shows which engagements and partners make money: project profitability, partner draws, ASC 606 on fixed-fee work, and W-2 and 1099 pay kept apart for California’s AB5 ABC test. Monthly bookkeeping runs $500–$2,500+/mo in your own QuickBooks file. Law firms: California law firm bookkeeping.
They took something that felt overwhelming to me as a first-year business owner and made it simple.
What stood out the most was TechBrot Inc’s attention to detail.
Intuit QuickBooks Certification Level 2 and QuickBooks Workforce Certification,
§ 01 · Why California practice books break
Three places California practices lose the numbers.
Service firms misread profit, tangle partner draws and carry contractor risk. Knowing which one you’re in tells us where to start.
01Partner draws
Partner draws tangled with expenses
Owner and partner draws, guaranteed payments and distributions booked as expenses or into one equity catch-all leave partner economics and the K-1 figures wrong. Law firms’ trust records are covered on California law firm bookkeeping and trust records.02Realization
A blended margin hiding losers
Without project- and matter-level tracking, a healthy firm-wide margin hides engagements and people billing below cost — realization and utilization stay invisible.03AB5
Contract talent as exposure
Contract attorneys, sub-consultants, and fractional staff doing core work are exactly what AB5’s Prong B reclassifies — hidden in the books until the EDD looks.§ 02 · What TechBrot handles
How we keep a California practice’s books by engagement.
Every engagement is scoped to your projects and partners, delivered in your own QuickBooks file by your TechBrot team, with every close reviewed by a Certified QuickBooks ProAdvisor.
01
Project & matter profitability
Time and cost tied to projects and matters so realization and utilization are visible by engagement.
Monthly bookkeeping02
Billing & collections tied to the books
Invoices and collections from your time and billing tools reconciled to QuickBooks every month, so realization reads from the books.
Bookkeeping services03
Partner-draw structure
Owner and partner draws, distributions, and capital accounts kept clean so the equity picture is right.
QuickBooks accountant04
AB5 contractor analysis
W-2 and 1099 pay separated and the misclassification exposure surfaced for your advisors.
AB5 classification05
ASC 606 on fixed-fee work
Revenue recognized correctly on fixed-fee and retainer engagements so the top line reflects work delivered.
Deferred revenue06
CPA-ready monthly close
A monthly close your CPA can file from and a lender or partner can trust.
Financial statements§ 03 · Tools we work alongside
Connected to how you bill.
- Clio, PracticePanther, and legal practice-management
- Harvest, Toggl, and time-tracking tools
- Bill.com for AP and vendor payments
- Gusto and payroll for W-2 staff
- QuickBooks Online or hosted Desktop — your file
We reconcile alongside the practice-management and billing tools you already run — the books read from how you bill.
§ 04 · How engagements work
From blended profit to engagement-level margin.
Every California professional-services engagement follows the same rhythm — books clean first, engagement margin second, advisory third.
- Step 1
Free practice & partner review
A QuickBooks ProAdvisor reviews your projects and partner structure — at no cost. - Step 2
Written fixed-fee scope
A written scope and fixed fee within 3 business days — cleanup, monthly, or both. - Step 3
Clean books & partner draws
Engagement tracking set up, partner draws and AB5 sorted, and the back periods reconciled. - Step 4
Monthly engagement margin
A monthly close showing realization and engagement margin and a CPA-ready position.
§ 05 · Beyond the books
Engagement margin is the start. Knowing your realization is the point.
When engagement margin and realization are visible, the decisions get clear: which service line to grow, which clients to fire, how to set rates — answered from books that tie.
That’s where fractional-CFO advisory picks up, on cleaned-up books, in coordination with your CPA.
Checked against the Labor & Workforce Development Agency (ABC test) and the EDD.
§ 07 · Around this page
Around California.
California QuickBooks ProAdvisor & bookkeeping
The state page: services, industries, cities and the California tax terms in one place.Professional Services accounting, nationally
The national engagement this page is the California version of — same scope, same written fixed fee.Also in California
Other California industries
California cities
Not sure where your file stands? Start with the free QuickBooks file review · how California compares: state-by-state tax quirks.
§ 08 · FAQ
California professional-services accounting questions.
What does California professional-services accounting include?
Project profitability tracking, partner-draw and capital-account structure, AB5 contractor analysis, ASC 606 on fixed-fee engagements, and a CPA-ready monthly close — for California consultancies and advisory practices, in your own QuickBooks file.
Do you handle IOLTA trust accounting for California law firms?
Yes. California law firm trust records, including the ledgers and monthly reconciliation State Bar Rule 1.15 requires, are covered on their own page: California law firm bookkeeping and trust records.
How do you measure which engagements are profitable?
By tying time and cost to projects and matters so realization (billed vs collected vs worked) and utilization are visible by engagement and by person. A blended firm-wide margin hides the engagements and staff billing below cost; engagement-level tracking shows you exactly where the profit is.
How does AB5 affect a California service firm?
California’s ABC test reaches contractors doing core work — a contract attorney, a sub-consultant, a fractional specialist. We keep W-2 and 1099 pay separated and surface the misclassification exposure in the books so your advisors can act. The classification determination and any EDD audit are handled by your CPA or employment attorney, not us; see our AB5 page.
Do you handle partner draws and distributions?
Yes — we keep owner and partner draws, guaranteed payments, distributions, and capital accounts clean so the equity picture is right and your CPA can handle the partner K-1s accurately. Draws and capital accounts are a standard part of a professional-services cleanup.
Do you work in my own QuickBooks file?
Yes — your file, your data, in QuickBooks Online or hosted Desktop, with a senior bookkeeper assigned to your file, and every close reviewed by a Certified QuickBooks ProAdvisor before it reaches you, connected to your practice-management and billing tools rather than proprietary software.
Do you work with advisory and consulting firms, not just law firms?
Yes — management consultancies, marketing and design consultancies, engineering and architecture practices, and advisory firms share the professional-services challenges: engagement profitability, partner draws, AB5 contractors, and ASC 606 on fixed-fee work. Law firm trust records have their own page: California law firm bookkeeping and trust records.
California practices start here