In a professional services business almost all cost is people and almost all risk is concentration. The books should make both visible.
Revenue, split by commitment
Retainer revenue — ongoing, contracted. Project revenue — defined scope, one-off. Consulting or advisory fees — hourly or day-rate work.
The split matters because retainers are predictable and projects are not — see recurring revenue and revenue consistency. A firm that looks stable on annual revenue can be entirely project-based and one lost client from a bad quarter.
Cost of delivery
Direct labour on client work, subcontracted specialists, and any project-specific costs.
The hard part is separating delivery time from everything else. Time spent selling, on admin, or on internal work is not cost of delivery — it is overhead — and firms that count all salary as delivery cost get a gross margin that means nothing.
Overhead
Salaries not on client work, premises, software, marketing and business development.
Marketing and business development is worth separating from general marketing, because in a services firm it is frequently senior people's time rather than advertising spend.
Insurance
Professional liability is the policy that matters here, not general liability. The risk is being wrong rather than breaking something, and general liability does not reach it.
What this setup gives you
Utilisation, which is the number a services business lives on, and the retainer-to-project ratio, which decides how much of next quarter is already known.