In short. A consulting or IT services firm needs few GL codes: revenue split by billing model (time and materials, fixed fee, subscriptions), rebilled expenses, cost of services (billable salaries, subcontractors, project expenses), operating expenses, and on the balance sheet receivables, unbilled receivables, deferred revenue and payroll liabilities. Client, project and business unit are not GL codes: they are dimensions on each entry.
The numbering below follows the common four-digit convention (1000 assets, 2000 liabilities, 3000 equity, 4000 revenue, 5000 cost of services, 6000 operating expenses). It is a convention, not a standard: France, for instance, imposes its own Plan comptable général.
Why a services firm’s chart of accounts is different
A consulting firm has no inventory and nothing to manufacture. Revenue comes almost entirely from services, payroll is the main cost, and the accounting difficulty lies elsewhere: separating what was billed from what was delivered, isolating rebilled expenses, tracking subcontractors, and reading margin by client and by project.
A well-built chart of accounts answers those questions with few accounts. A badly built one adds an account per client, then per project, and becomes impossible to maintain.
Sample GL codes list
Revenue (4000)
| Code | Account | Use |
|---|---|---|
| 4000 | Consulting fees – time and materials | Approved days × day rate |
| 4010 | Consulting fees – fixed fee | Milestones and percentage-of-completion revenue |
| 4020 | Subscriptions, retainers and support | Recurring fees, recognised over the period covered |
| 4100 | Reimbursable expenses billed | Travel and project costs rebilled to clients |
| 4900 | Discounts and credits | Commercial discounts granted after invoicing |
Cost of services (5000)
| Code | Account | Use |
|---|---|---|
| 5000 | Billable staff salaries | Salaries of consultants assigned to client work |
| 5010 | Billable staff payroll taxes and benefits | Employer contributions for the same people |
| 5100 | Subcontractors and freelancers | Contractors working on client engagements |
| 5200 | Reimbursable project expenses | Travel and costs incurred for a client, rebilled or not |
Operating expenses (6000): the expense codes
| Code | Account | Use |
|---|---|---|
| 6000 | Non-billable salaries | Management, sales, finance, HR |
| 6100 | Rent and office costs | Premises, utilities |
| 6200 | Software and subscriptions | SaaS tools, licences |
| 6300 | Travel and entertainment (internal) | Trips not tied to a client engagement |
| 6400 | Marketing and business development | Events, advertising, proposals |
| 6500 | Professional fees | Accountants, lawyers, auditors |
| 6600 | Training and recruitment | Courses, recruiting fees |
Balance sheet (1000–2000)
| Code | Account | Use |
|---|---|---|
| 1100 | Cash and bank | Operating accounts |
| 1200 | Accounts receivable | Invoices issued and not yet paid |
| 1250 | Unbilled receivables / accrued revenue | Work delivered but not yet invoiced at period end |
| 1300 | Prepaid expenses | Costs paid in advance |
| 2000 | Accounts payable | Suppliers and subcontractors |
| 2100 | Accrued liabilities | Subcontractor days worked but not yet invoiced |
| 2200 | Deferred revenue | Fees billed ahead of delivery, retainers |
| 2300 | Payroll liabilities | Salaries, payroll taxes, expense reimbursements due |
| 2400 | VAT / sales tax payable | Tax collected on invoices |
Splitting cost of services (5000) from operating expenses (6000) is what gives you a gross margin on services: revenue minus the cost of the people and contractors who delivered it.
Sample journal entries
A time-and-materials invoice
18 days at €780 and 6 days at €950: €19,740 net, plus 20% VAT.
| Account | Debit | Credit |
|---|---|---|
| 1200 Accounts receivable | €23,688 | |
| 4000 Consulting fees – T&M | €19,740 | |
| 2400 VAT payable | €3,948 |
A rebilled expense
A €420 trip for a client engagement, rebilled at cost: debit 5200 when the expense report is approved; credit 4100 for €420 on the client invoice.
A freelancer’s invoice
12 days at €600: debit 5100 for €7,200, credit 2000. If the days are worked in December and invoiced in January, the year-end close accrues them in 2100.
Closing a fixed fee
Unbilled receivables (1250) or deferred revenue (2200) on a fixed fee come from percentage of completion: see the worked example in our guide to accrued revenue.
The golden rule: client and project are dimensions, not GL codes
It is tempting to open a revenue account per major client or per project. It leads to hundreds of accounts, slower closes and a chart of accounts that needs editing for every new contract. The general ledger answers “what kind of amount is this?”. “For which client, project, business unit?” is answered by dimensions (also called tracking categories, classes or cost centres) carried by each entry.
| Question | Where it belongs |
|---|---|
| T&M, fixed fee or subscription? | Revenue GL code |
| Which client? | Customer subledger and a dimension |
| Which project or engagement? | Dimension |
| Which business unit or office? | Dimension |
| Rebillable or not? | Attribute of the expense line, checked at rebilling |
Project margin then comes from reading the project dimension across revenue, subcontractors, project expenses and payroll costed by time spent.
What AlibeeZ does
AlibeeZ carries the account number and the analytical dimension on every invoice and approved purchase, then sends them as entries to your accounting software (Pennylane, Cegid, Sage, or Xero and MYOB for subsidiaries abroad). Each expense line carries its nature, project and cost centre from the moment it is entered. Your accountant receives entries already split, with no re-keying. See invoice generation and expense entry.
Frequently asked questions
What are GL codes?
General ledger codes are the account numbers of a company’s chart of accounts. Each transaction is posted to one or more of them, which is how revenue, costs, assets and liabilities are grouped in the accounts.
What GL codes does a consulting firm need?
Revenue by billing model, rebilled expenses, cost of services (billable salaries, subcontractors, project expenses), operating expenses, and on the balance sheet receivables, unbilled receivables, deferred revenue, payables and payroll liabilities. A few dozen accounts are usually enough.
Should I create a GL code for each client or project?
No. Use a customer subledger and dimensions for client, project and business unit. The GL code should describe the nature of the amount, not who it is for.
Where do rebilled expenses go?
The cost goes to an expense account when incurred; the rebilling goes to a revenue account for reimbursable expenses. Keeping both lets you check every month that every rebillable expense was actually rebilled.
How are expense codes different from GL codes?
Expense codes are the categories employees pick on an expense report (travel, meals, accommodation). Each one maps to a GL code, so the expense report posts to the right account without the finance team recoding it.
