What is Consulting Fees In Accounting

What Does Consulting Fees In Accounting?

A fees which is paid to consulting firm by the company against the services (such as getting advice from accountant, law firm, lawyer, etc.,) it received from such consulting firm. Such consulting firm provides services to the company on various projects from time to time in order to solve the problems of the company faced by it on these types of projects. For example, what kind of steps should be taken to complete a given task, which is the best option to choose for the investment plans, etc.

Consulting fees is an Expense for the company to pay to the consultants hired for different projects and it is shown on Income Statement.

The journal entry to record consulting fees is debit to consulting fees expense account and credit to cash account or bank account as shown below:

                                  Consulting Fees Expense a/c  XXX

                                                                               Bank a/c / Cash a/c  XXX

                                                   (Consulting Fees Expense Paid For Cash / Bank)

Consulting Fees may be Accrued during the period when the company did not make payment to consultants for the services they rendered to it during the accounting period.