3 steps to get actionable financial metrics for consulting firms

Today’s consulting organisations need to benchmark financial and operational data to improve continuously, drive growth, and remain competitive.

Identifying and evaluating available data and using it to define actionable KPIs can be a challenge. Especially as priorities can shift quickly and the target keeps moving. Being able to pull it off demands not only the right skills but also an agile technology infrastructure.

Firms that don’t pay close attention to these elements often find forecasting, adjusting, and strategizing difficult – to the detriment of their success and client satisfaction.

Step 1:

Build the financial infrastructure for sustainable growth

Before you can identify the best metrics for your business, you must ensure that the foundations are in place.

For example:

• How do you set up your general ledger?
• How do you structure your business regarding departments, cost centres, regions, etc.?
• Are there different tax entities?
• Are you going to do consolidations?

Spending time upfront to figure out exactly how you want to structure things will save you headaches in the long run. Especially growing companies struggle with this. Metrics that seem sufficient initially may not be detailed enough after a period of rapid growth.

“If you don’t classify it, it’s hard to report on it later on. Think about where your company is headed geographically, with service offerings, with organisational structure, etc. and classify this data now so you can make data-driven decisions on this later on.”

Tania Zieja, CFO, Halloran Consulting

Investing in your financial infrastructure means investing in being a better business. That’s why it’s critical to take the implementation of a financial system seriously. Don’t just recreate your old processes in a new system.

Step 2:

Get actionable KPIs that your team can monitor

How do you measure project profit today?

Are your projects repeatable, cookie-cutter, or specialised and different for every customer? If your tasks are repetitive and costs don’t fluctuate, you probably know what a project will cost you and what to bill. But no two clients are the same, so for most professional service companies, even repetitive projects tend not to be the same. That means your costs and profits aren’t the same either. What are the right metrics to track?

Step 3:

Build a culture of financial responsibility

To engage your senior leadership more, you can recruit them to help onboard more junior consultants and project managers. That way, junior members can learn from the best. For the seniors, it can be a feather in the cap, but it also helps them to have more motivation to adhere to some of the best practices you’re trying to promote.

“When we were doing weekly timesheet submissions, we were losing accurate data due to the time lag between when the work was performed and when the timesheet was submitted. …We couldn’t drive real-time data-driven decisions with week old data…  Daily timesheet submission was an adjustment, but the integrity of the data made it worthwhile and now it is simply part of everyone’s daily routine.

Tania Zieja, CFO, Halloran Consulting

Create a mentorship program

To engage your senior leadership more, you can recruit them to help onboard more junior consultants and project managers. That way, junior members can learn from the best. For the seniors, it can be a feather in the cap, but it also helps them to have more motivation to adhere to some of the best practices you’re trying to promote.

Daily time sheets

Best-in-class consulting firms like Halloran Consulting require daily timesheet submissions. Switching to a daily routine allows Zieja to understand what is going on at the firm date to date and be a proactive leader. She also says that timesheets must be bought into right from the top down to get that data in daily. With the way Halloran set up their system, they reconcile their data nightly and expect every single person in the company to look at the dashboards regularly.

“The more proactive you can be going into the month-end close, the more time you’ll have to convert what you’re selling into cash. As soon as an invoice moves past the 30-day mark, we’re reaching out to our clients to make sure we have the right billing contact and that there aren’t any questions about the invoice. A simple outreach like this has made a huge impact to our cash flow.”

Tania Zieja, CFO, Halloran Consulting

The way forward

As an accredited and awarded Sage Intacct reseller, we view our clients’ success as our own and help them find their way forward. Offering ongoing support, training, and resources ensures that our clients maximise the benefits of Sage Intacct and stay abreast of the ever-evolving business landscape.

Having implemented Sage Intacct for many businesses in ANZ across diverse industries, our experience spans areas such as Software and SaaS, Family Offices, Non-profit Organisations, Financial Services, NDIS and Human Services and many other industries.

Please email us at Akuna Solutions for a free consultation and explore with a Sage Intacct implementation specialist how to leverage modern technology available today to future-proof your business operations.