How Dynamics 365 for Professional Services Can Transform Service Firms

Professional services firms make money from people and projects. So they need to keep track of where people are working, how much time they spend, what each project costs, and what it brings in.

This matters across a large part of the UK economy. Financial and related professional services contributed around £290 billion in UK real gross value added (GVA) in 2025, accounting for 11% of total UK economic output. The industry employed almost 2.5 million people across the UK in 2024, or about 7.5% of total UK employment.

For an individual firm, the issues are often much more ordinary. A consultant may submit a timesheet late. A project manager may not know how much of the budget is left. Finance may be waiting for expenses to be approved before an invoice can go out.

None of these problems is unusual on its own. They become harder to manage when a firm is running many projects at once.

Dynamics 365 for Professional Services can help bring these activities together. Dynamics 365 Project Operations covers project management, resource planning, time and expenses, project costing, billing, and project accounting. It can also work with Dynamics 365 Finance when broader financial management is needed.

Dynamics 365 for Professional Services: Overview

Dynamics 365 is a set of business applications. Firms can use different apps for different parts of their work.

For project-based firms, Dynamics 365 Project Operations covers project planning, resources, time and expenses, project costs, billing, and project accounting. It can be used from the early planning stage through to project billing.

Dynamics 365 Finance can handle the wider finance side, including accounting, reporting, and budgeting.

A firm can also use Dynamics 365 Sales for opportunities and client information, while Teams can be used for project meetings and communication.

The main point is that firms can choose the applications they need instead of moving every business process into one system.

How Dynamics 365 Helps Professional Services Firms

Think about what happens after a firm wins a project.

The sales team has the client and contract details. The project manager needs to plan the work and assign people. Consultants record their hours and expenses. Finance then needs that information for billing and project reporting.

If each team keeps its own records, someone has to join the dots.

That might mean updating a spreadsheet, checking with another team, or waiting for a report before knowing where a project stands.

Project Operations can support these activities through the project workflow, from the initial sale through planning, delivery, time and expense recording, and billing.

Project and Resource Management

For a professional services firm, resource planning is closely tied to project delivery.

A project may need people with particular skills, but those employees could already be working on other projects. Managers need to know who is available, when they are available, and what work they are already committed to.

Project Operations provides tools for managing resource profiles, skills, availability, bookings, and project assignments.

For example, a consulting firm could have a new project starting next month that needs two consultants with a particular area of expertise. Instead of checking several spreadsheets or asking managers for separate updates, the firm can use the resource information in Project Operations when planning the assignment.

This becomes more useful as the number of projects grows and people are shared across teams.

Dynamics 365 Time and Expense Management

Time recording can seem like a small administrative task until finance needs the information for billing and project costing.

Project Operations allows employees to submit time and expenses, while managers can review and approve those entries. The information can then be used for project costing, billing, and accounting.

For a time-and-materials engagement, approved consultant hours can form part of the information used for client billing.

It also gives project managers a better idea of how much of the planned effort has already been used.

Dynamics 365 Project Accounting and Profitability

Knowing whether a project is profitable is difficult when the costs and revenue are recorded in different places.

A project might look profitable based on what has been invoiced. Add consultant time, expenses, subcontractor costs, and other charges, and the numbers may look very different.

Project Operations supports project costing, budgets, billing, revenue recognition, and project accounting. It also allows project teams to compare budgets with actual project consumption as work progresses.

The basic flow is:

Project work → Time and expenses → Project costs → Billing → Revenue → Profitability

This gives managers a chance to spot cost problems while a project is still running rather than finding them after the work has finished.

Finance and Business Operations

Project managers and finance teams may use the same project information for different reasons.

A project manager might be watching hours, deadlines, and the remaining budget. Finance is more concerned with costs, billing, revenue, and accounting entries.

When both teams can work from the same information, there is less need to prepare separate figures.

Project Operations can work with Dynamics 365 Finance or external ERP systems, depending on the firm's setup. For businesses already using Finance, this can bring project activity closer to their wider financial processes.

Microsoft 365 and Dynamics 365 Integration

Many professional services firms already use Microsoft 365 for email, meetings, documents, and team communication.

Dynamics 365 can fit into that setup rather than sitting on its own. Teams, Excel, and Power Platform can be used alongside Dynamics 365, depending on what the firm needs.

For example, a project team might use Teams for discussions and meetings, while project details, resource assignments, timesheets, expenses, and financial information are managed through Dynamics 365.

This means employees can keep using the Microsoft tools they already know without maintaining separate project records in different places.

Dynamics 365 for Different Professional Services Firms

Different types of firms will use Dynamics 365 in different ways.

Consulting Firms

Consultancies need to keep track of consultants, project hours, client billing, utilisation, and margins.

Project Operations can help manage these areas. For a firm running several projects, it can also help managers see where people are assigned and how much time is being used.

Engineering Firms

Engineering projects can run for months or years. They may involve several teams, subcontractors, expenses, and changes to the original scope.

Keeping project costs and financial information together can make it easier to see how those changes affect the budget.

Legal and Advisory Firms

Time recording and billing are important for many legal and advisory firms.

Dynamics 365 can support these areas, but a legal business may still need specialist practice-management software for functions that are not covered by its Dynamics 365 setup.

The applications and integrations needed will depend on how the firm works.

Benefits of Dynamics 365 for Professional Services

The benefits will depend on what is causing the most difficulty in the firm's current setup.

For some firms, the main issue may be project cost control. Others may be spending too much time on timesheets and expenses or struggling to plan resources across several projects.

For finance, that can mean less time checking project records before billing. For project managers, it can mean a quicker view of costs, hours, and the remaining budget.

A consultancy may focus more on utilisation and project margins, while an engineering firm may put more weight on project costs and budgets.

What to Consider Before a Dynamics 365 Implementation

Before starting an implementation, look at how the firm handles projects today.

How are new projects sold and set up? How are people assigned? Where do employees record time and expenses? How does finance receive that information? What systems are already being used?

Some firms may have accounting software, CRM systems, HR applications, or specialist project tools that they want to keep. These need to be considered when planning the Dynamics 365 setup.

Data migration also needs attention. Client records, projects, resources, historical transactions, and financial data may all need to be reviewed before deciding what should move into the new system.

Reporting and user access should be planned as well. A project manager will not need the same information as a consultant or finance user.

How Dynamics Square UK Can Help

Dynamics Square UK can help professional services firms plan and implement Dynamics 365, including Project Operations, data migration, system integration, and ongoing support.

This can cover project management, resource planning, time and expenses, project accounting, and reporting. The setup can be based on the firm's existing systems and the way its teams manage projects and billing.

Final Thoughts

There is no single Dynamics 365 setup that will suit every professional services firm.

The better starting point is to look at where the current process is causing problems. It could be resource planning, project costs, time recording, billing, or the way information reaches finance.

From there, a firm can decide which parts of Dynamics 365 are actually useful and which existing systems should stay in place.

If you're considering Dynamics 365 for your professional services business, Dynamics Square UK can review your current setup and help plan an implementation around the way your teams work.

FAQ’s

What is Dynamics 365 for Professional Services?

It refers to using Dynamics 365 applications, particularly Project Operations, to manage projects, resources, time, expenses, billing, and project accounting.

How does Dynamics 365 help professional services firms?

It helps firms manage project sales, resources, project work, time, expenses, billing, and financial processes in a more connected way.

Which Dynamics 365 apps are best for professional services?

Project Operations is the main option for project-based firms. Depending on requirements, it can be used with Dynamics 365 Sales, Finance, and other applications.

Is Dynamics 365 suitable for consulting companies?

Yes. It can support consulting projects, resource planning, time tracking, expenses, billing, and project financials.

Can Dynamics 365 manage projects and resources?

Yes. Project Operations supports project planning, resource bookings, skills, availability, assignments, and utilisation.

How does Dynamics 365 improve project profitability?

It tracks project costs, budgets, time, expenses, billing, and revenue, helping managers see project performance while work is underway.

What are the benefits of Dynamics 365 Project Operations?

It covers project sales, planning, resources, time and expenses, project management, billing, and accounting.

Can Dynamics 365 integrate with Microsoft 365?

Yes. Project Operations works with Microsoft Teams, and Dynamics 365 can also be extended through Power Platform and other Microsoft applications.

Is Dynamics 365 good for engineering and legal firms?

It can support project, resource, time, expense, billing, and financial processes. Legal firms may still need specialist software for legal-specific functions.

How much does Dynamics 365 for Professional Services cost?

There is no single implementation cost. Dynamics 365 Project Operations is currently listed by Microsoft at $135 per user/month, paid yearly in the US, while implementation, integrations, data migration, and other Dynamics 365 licences add to the overall cost.