Sell time well.
Bill it on time.
Agencies, consultancies and other firms that sell expertise live on utilization, project margin and the gap between doing the work and getting paid for it. We run finance for professional-services firms so capacity, pipeline and cash are planned as one system — and every project shows its margin.
What is different about
finance in professional services.
There is no inventory on the balance sheet, but there is plenty of it in the building. Services finance is about people, hours and the billing cycle.
Capacity is the inventory
Billable utilization is the number the firm runs on. Below 55% you are over-staffed; above 85% you are burning people out. Both are risks, and hiring has to be planned against pipeline, not against last quarter’s hours.
Project margin hides in scope creep
Revenue minus directly attributable cost, per project, is the only honest margin. Above 25% is healthy; below 15% means scope creep is eating the firm. Time has to be tracked to projects and costed at loaded rates, or the P&L looks fine while individual projects lose money.
WIP and billing are where cash goes missing
Work done but not yet billed is unpaid inventory. Slow billing cycles, unclear milestones and generous payment terms stretch the cash cycle for months. Billing discipline is a finance process, not an admin task.
Pipeline decides next quarter’s headcount
Ninety-day pipeline coverage of 3x is the rule of thumb; below 2x the next quarter is precarious. Pipeline, capacity and hiring belong in one model, with client concentration — the share of revenue from your largest account — tracked alongside.
What we do for
professional-services firms.
The same four disciplines we run for every client, with the deliverables an agency or consultancy actually needs.
- Capacity & hiring plan
- Pricing & rate-card strategy
- Partner & owner reporting
- Client concentration risk
- Utilization & margin model
- Pipeline-to-capacity forecast
- Cost allocation & overhead
- Quarterly reforecast
- WIP & revenue recognition
- Billing & receivables cadence
- Payroll & contractor costs
- Monthly close
- Project margin dashboard
- Utilization & pipeline KPIs
- Monthly management pack
- Partner or board review
Four articles
worth an hour.
From our Insights library. Long-form, practical, written for founders — not for other finance people.
Three questions
professional services founders ask.
If yours is not here, book a 30-minute intro call and we will talk it through.
Almost always WIP and receivables. Revenue is recognised when the work is done; cash arrives when the invoice is raised, sent, approved and paid. Shortening that cycle — milestone billing, weekly invoicing, chasing on a schedule — usually does more for cash than any cost cut.