Can Your Financial Management System Support Your Growth?

Professional service firms are seeing new business pick up.

This is good news.  However, coming out of several lean years, many companies may find their internal infrastructure is not as strong or tight as it was 5  to 10 years ago.   During this time period accounting and financial systems have had dramatic and dynamic upgrades.

Research by Service Performance Insight suggests that many PSFs have  business and information systems that are outdated and stretched thin.  Streamlining business operations and providing up to date financial systems is a top priority to support firm growth.

Signs that your financial system needs a review:

  • Monthly financial reports are late & inaccurate.
    • Getting billing out & closing the books is a painstaking process that never seems to end.
    • The quarter is over and the first month’s reports have just been issued.
    • People forget key tasks and make errors.
  • Data is out of date before you see it.
    • Service delivery demands real time data.
    • Budgets, Actual and Estimates need to be updated real time.
    • Waiting for the project to end to learn what happened is bad risk management
    • The old centralized entry of time sheets and expense reports is out.
  • You don’t understand what these reports mean or what data to look at.
      • Do you know who your most profitable clients are?
      • Do you know who your most profitable employees are?
      • Is your business development forecasting integrated with your budgeting system
  • Top line Revenue Growth but no bottom line improvement
      • Client billings are increasing, but the bottom line is not.
      • Delays in completing reports and inaccuracies make it difficult to understand the relationship between Net Fees and Net Income.
      • Real time data is needed to take action in a timely manner.
      •  Consultants are used while internal staff is underutilized.

Are your systems and procedures capable of supporting your firm’s growth plans?

The WinterView Group “100,000 Mile Service for Business Operations” can help you answer, YES!

The 2080 Rule for Professional Service Firms

Partners & Principals in Profitable Professional Service and Consulting firms know these rules and metrics:

  • 2080 Baseline
  • 3x+ multiple
  • Utilization rate
  • Realization rate

Every month these firms update the answers to the following questions:

  • What is the revenue generating capacity of our current team?
  • How do we know when we can add staff and maintain profit margin goals?
  • How do we know when we should reduce staff to avoid losses?