Professional services
Know which engagements make money, while they are still running
In a services firm the inventory is time, and it perishes. We build the reporting that shows which engagements earn and which quietly do not — early enough that something can be done about it.
Time recorded, billed, collected.
Three numbers that are never the same
At a glance
Time is recorded late and approximately, so engagement cost is an estimate.
Engagement economics
Engagement profitability, with cost to complete.
The economics
Why the numbers are harder here
A professional services firm sells hours it cannot store. Revenue depends on how much of the available time is worked, how much of the worked time is billed, and how much of the billed time is collected. A firm can be busy at every stage and still lose money if the gap between those three widens.
The gap usually opens quietly. Scope grows without a variation, time is written off at billing rather than questioned when it is incurred, and work sits unbilled long enough that invoicing it becomes awkward. None of this shows up in a monthly P&L until the quarter is already gone.
The problem
Where visibility breaks down
- Time is recorded late and approximately, so engagement cost is an estimate.
- Work in progress ages without anyone deciding whether it will be billed or written off.
- Scope grows without a variation, and the extra effort is absorbed rather than charged.
- Realisation is known in aggregate but not by engagement, partner or client.
- Collections follow invoicing by so long that the cash cycle is longer than anyone believes.
Where we concentrate
How we focus the engagement
Engagement economics
- Profitability by engagement, client and partner, not only by firm.
- Realisation measured against time recorded, with write-offs attributed.
- Utilisation reported by person and grade, separated from realisation.
- Unbilled work in progress aged, with a decision forced at a stated point.
- Scope variations captured when they occur rather than at settlement.
Billing and collection discipline
- A billing cycle that runs to a calendar rather than to whoever remembers.
- Fee arrangements documented, so the invoice matches what was agreed.
- Deduction of tax at source tracked and reconciled against the credit available.
- Receivables followed on a defined rhythm rather than when cash gets tight.
- Partner drawings separated from firm profit, so both are visible.
Reporting
Reports worth receiving
- Engagement profitability, with cost to complete.
- Realisation and utilisation, reported separately.
- Work in progress ageing and write-off analysis.
- Receivable ageing by client and partner.
- Revenue per person, by grade.
Common questions
Questions we hear in this sector
Our people resist timesheets. Is this workable without them?
Engagement profitability needs some record of where effort went. It does not need six-minute precision. A practical level of recording, consistently applied, produces most of the insight; over-engineering the system is usually what causes the resistance.
What is the difference between realisation and utilisation?
Utilisation is how much of someone's available time was worked on client matters. Realisation is how much of that worked time was actually billed and collected. A firm can be fully utilised and still poorly realised, and the fix for each is different.
Can you help with partner-level reporting?
Yes. Profitability by partner portfolio, with drawings separated from profit share, is standard work — and often the first time the economics of each portfolio have been visible.
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