Managing Consulting Finances

I spent less than 1 hour filing taxes this year. Not because we didn’t make money. :) But because we planned. Planning saves me stress, valuable time, and energy that should go into finding leads and closing deals. Here is how you can get ahead of the game and prepare next March: ☑ 𝗛𝗶𝗿𝗲 𝗮 𝗕𝗼𝗼𝗸𝗸𝗲𝗲𝗽𝗲𝗿: No matter how small your business is, a bookkeeper organizes your financial records and categorizes items correctly. ☑ 𝗥𝗲𝘃𝗶𝗲𝘄 𝗠𝗼𝗻𝘁𝗵𝗹𝘆: By the 10th of each month, review your P&L and financial statements with your bookkeeper. This keeps you informed. ☑ 𝗦𝗰𝗵𝗲𝗱𝘂𝗹𝗲 𝗧𝗮𝘅 𝗣𝗹𝗮𝗻𝗻𝗶𝗻𝗴: In the Fall, book an hour with a CPA for tax pre-planning. This helps you explore options and trade-offs. ☑ 𝗜𝗱𝗲𝗻𝘁𝗶𝗳𝘆 𝗣𝗼𝘁𝗲𝗻𝘁𝗶𝗮𝗹 𝗣𝗮𝘆𝗺𝗲𝗻𝘁𝘀: Know the large amounts of money you may need to pay (if profitable). This prepares you for any surprises. ☑ 𝗦𝘂𝗯𝗺𝗶𝘁 𝗗𝗼𝗰𝘂𝗺𝗲𝗻𝘁𝘀 𝗶𝗻 𝗙𝗲𝗯𝗿𝘂𝗮𝗿𝘆: Hire the CPA again in February to submit the paperwork. Send last year’s financial documents to them. Taxes are stressful enough. Don't add to that stress by procrastinating. PS. I'm forever grateful to all the financial professionals in my life!

Q1 is in the books—now what? 📊 The first quarter sets the stage for the year, but success comes from adjusting and refining as you go. If you have a fractional CFO, now is the time to reforecast and assess your first-quarter performance. Here's how to approach it. 1️⃣ Review Revenue Performance – Look at what's working. Which offerings are performing well? Where is there room for growth? Identify what you should double down on and what might need to shift. 2️⃣ Evaluate Expenses – Reassess your spending. Are there costs to cut, areas to invest in, or strategic adjustments to make? Most importantly, analyze how these changes will impact cash flow and plan ahead to prevent any potential shortfalls. 3️⃣ Set Clear Q2 Goals – Be specific. If hiring is a priority, factor in salary costs and define the role. If revenue growth is the focus, outline a financial target and determine key metrics to track progress. 4️⃣ Do scenario testing - Imagine revenue declined by 10% or 25%, what would you do in terms of managing costs? How would you stretch your cash? What new revenue streams make sense to offer from launching a new product/service to marketing current offerings to a different client market? What do your clients need NOW? Interview them. The goal is to stay agile and intentional—making data-driven decisions that align with your business growth strategy. 💭 What adjustments are you making for Q2? Let’s discuss in the comments! #CEOLife #FinancialTip #SmallBusinessFinance #WomeninBusiness #Entrepreneurship

Resource planning separates successful firms from those constantly scrambling to meet deadlines 📊 Most finance teams operate in reactive mode, putting out fires instead of preventing them. I've worked with dozens of clients who struggle with this exact problem. They're always stressed, always behind, and wondering why profitability suffers despite working harder than ever. ➡️ CAPACITY PLANNING FOUNDATION You know what I've learned after years of helping firms optimize their resources? It all starts with forecasting your hours correctly. See, when you can predict workload based on historical data and upcoming client needs, you avoid that feast or famine cycle that absolutely crushes profitability. Monthly recurring revenue clients need consistent attention too. Don't make the mistake I see so many firms make by forgetting about them during busy season. Client volume scaling requires a completely different approach. Growing your client base means different staffing patterns and retention strategies. Plan resources based on both current clients and realistic growth projections. ➡️ BUDGET VS ACTUALS Track your planned versus actual resource utilization religiously. Variance patterns tell you exactly where your assumptions are off. Sometimes it's scope creep eating up resources. Sometimes it's inefficient processes slowing everyone down. Sometimes it's just unrealistic estimates from the start. Your resource planning gets better when you learn from what actually happened versus what you expected. Create accountability across your team so everyone understands how their work impacts overall capacity. ➡️ TIME TRACKING Without accurate time data, resource planning becomes pure guesswork. Monitor your billable versus non-billable ratios to understand true capacity. That administrative time still consumes resources and needs planning. Track project profitability in real-time so you can course-correct before it's too late. Waiting until project completion to assess profitability costs money. Use time data to identify productivity bottlenecks. Maybe certain work takes longer than expected, or specific team members need additional training. ➡️ STANDARD OPERATING PROCEDURES Document your repeatable processes and workflows. This dramatically reduces training time for new team members. Consistent processes mean more predictable resource requirements. When everyone follows the same approach, you can actually forecast capacity accurately. ➡️ CLIENT SCOPE DEFINITION Clearly define project boundaries upfront. Scope creep destroys resource planning faster than anything else I've seen. Set realistic client expectations from the start and stick to them. When clients want additional work, have a system to price and resource it properly. === Resource planning isn't glamorous work, but it's what separates profitable firms from those working harder for less money. What's your biggest resource planning challenge?

Far too many Consulting firms struggle to scale beyond the influence of their Founder. They fail to build recurring revenue channels that extend beyond the Founder’s personal network and reputation. Instead of intentional growth, they operate on ad hoc improvisation—saying yes to everything, reacting to the flow of the day, and never truly designing a scalable model. The result is scattered efforts, unpredictable revenue, and a ceiling that’s impossible to break. Many Founders hesitate to hire senior experts due to their high cost, despite these individuals being best positioned to drive business growth. Even when they do bring them on board, they are often reluctant to grant equity, many Founders believe that they should retain all rewards since they created the original value. This mindset overlooks a crucial reality: securing and retaining senior talent with client relationships for the long term is what truly enhances equity value. The priority should be building a team of senior specialists with strong market reputations from day one. Paying above market rates and offering long-term equity incentives isn’t just an expense—it’s a strategic investment in credibility, accelerated growth, and early wins with high-value clients. Another defining factor is positioning. Many early-stage Consulting firms spread themselves too thin, saying yes to whatever comes their way. Sustainable growth comes from solving a well-defined, high-value problem better than competitors and shaping this into a repeatable process. Firms that dilute their expertise struggle to establish authority. Specialisation builds authority and pricing power. Client acquisition is another common stumbling block. Instead of chasing leads through cold outreach, the most successful consulting firms focus on becoming the reference in their field. Sharing insights, educating the market, and consistently reinforcing expertise creates demand, reducing reliance on unpredictable deal flow. Long-term success comes from consistently evolving expertise, deepening client relationships, and building a market-defining reputation.. Firms that take this approach position themselves as dominant players, creating a business that doesn’t just grow—it thrives on its own momentum.

One client delayed the invoicing by 10 days and ended up with an $10K cash crunch. All because the system that delivered the work wasn’t the system that asked for payment. That’s the thing about late invoices. They don’t just delay cash. They break momentum. 👉 You pause hiring. 👉 You delay vendor payments. 👉 You hold off on growth opportunities And the worst part? It’s avoidable. Here’s what I advise every founder to do: 1. Automate invoice triggers ⤷ Send them to go out the moment a milestone is marked complete. 2. Make payment frictionless ⤷ Attach payment links directly to the invoice. Fewer clicks = faster collections. 3. Clarify terms early ⤷ Don’t just hide them in the contract. Say it upfront, again in onboarding, and reinforce gently. 4. Schedule auto-reminders  ⤷ Three days before the due date. Again, on the due date. Let software do the nudging. 5. Review receivables weekly ⤷ Block 30 minutes. Check what’s due. Don’t outsource what you should be owning. PS: How do you make sure your clients understand your payment terms upfront?

You think you’re profitable…  But your bank account tells a different story. Managing cash flow can feel like a constant puzzle. Late client payments strain your resources, while vendor bills pile up, adding to the pressure. As a result, your business decisions slow down, and growth opportunities slip away. The constant worry about cash impacts your leadership, while delayed supplier payments damage relationships and late fees continue to eat into your profits. But you don’t need to worry more! You can fix this and master your cash flow. By two strategies: 1. Accounts Receivable Strategy: - Send invoices immediately after service - Offer early payment discounts - Set clear payment terms - Follow up consistently - Use digital payment options 2. Accounts Payable Management: - Negotiate favourable payment terms - Track due dates systematically - Take advantage of early payment discounts - Maintain vendor relationships - Plan payment schedules Think of accounts receivable as your accelerator and accounts payable as your brake. Balance them well, and your business runs smoothly. You'll transform from constantly checking bank balances to confidently making business decisions. #accountsreceivable  #accountspayable  #finance  

Collecting money is a pain in the a**. I’ve tried every fancy debt collection system. Nothing works as well as this painfully simple strategy: 𝟭. 𝗣𝗲𝗿𝘀𝗼𝗻𝗮𝗹𝗶𝘇𝗲𝗱 𝗥𝗲𝗺𝗶𝗻𝗱𝗲𝗿 𝗦𝘆𝘀𝘁𝗲𝗺 Don't let automated messages do the talking. Personalize your reminders with a friendly, human touch. A simple, personalized email or call can make a world of difference in getting those overdue payments settled. 𝟮. 𝗜𝗻𝗰𝗲𝗻𝘁𝗶𝘃𝗲-𝗕𝗮𝘀𝗲𝗱 𝗥𝗲𝗽𝗮𝘆𝗺𝗲𝗻𝘁 Motivate your clients to pay on time by offering small discounts or benefits for prompt repayments. It's a win-win; they save a bit, and you get your dues faster. 𝟯. 𝗧𝗿𝗮𝗻𝘀𝗽𝗮𝗿𝗲𝗻𝘁 𝗖𝗼𝗺𝗺𝘂𝗻𝗶𝗰𝗮𝘁𝗶𝗼𝗻 𝗣𝗿𝗼𝘁𝗼𝗰𝗼𝗹 Clear, consistent communication is key. Establish a protocol for transparent communication about debts — it reduces the risk of misunderstandings. Ensure your clients know exactly what they owe and why. 𝟰. 𝗖𝘂𝘀𝘁𝗼𝗺𝗶𝘇𝗲𝗱 𝗣𝗮𝘆𝗺𝗲𝗻𝘁 𝗣𝗹𝗮𝗻𝘀 One size doesn't fit all in debt repayment. Tailor payment plans to individual client circumstances. This flexibility often increases the likelihood of repayment and ensures you meet the needs of all clients. 𝟱. 𝗥𝗲𝗮𝗹-𝗧𝗶𝗺𝗲 𝗗𝗲𝗯𝘁 𝗧𝗿𝗮𝗰𝗸𝗶𝗻𝗴 𝗗𝗮𝘀𝗵𝗯𝗼𝗮𝗿𝗱 Use a simple, user-friendly interface where both parties can monitor outstanding debts. It ensures everyone's on the same page and provides an easy way to keep track. 𝟲. 𝗙𝗿𝗲𝗾𝘂𝗲𝗻𝘁 𝗨𝗽𝗱𝗮𝘁𝗲𝘀 In the most non-intrusive way possible, keep clients informed about their debt status with regular updates. These reminders keep the debt on their radar, but it's your job to ensure they're not overbearing. 𝟳. 𝗘𝗺𝗽𝗮𝘁𝗵𝘆 𝗧𝗿𝗮𝗶𝗻𝗶𝗻𝗴 𝗙𝗼𝗿 𝗖𝗼𝗹𝗹𝗲𝗰𝘁𝗶𝗼𝗻 𝗦𝘁𝗮𝗳𝗳 Nobody likes being pestered about their debt. Handling it too aggressively can leave a bad taste in the client's mouth. Train your staff to focus on empathy and understanding. This equips them to preserve client relationships even in tough financial situations. Debt collection doesn't have to be complex or aggressive. This simple strategy has been a game-changer for me. Use it and get that bag!

𝘋𝘰 𝘸𝘦 𝘩𝘪𝘳𝘦 𝘯𝘦𝘸 𝘱𝘦𝘰𝘱𝘭𝘦 𝘣𝘦𝘧𝘰𝘳𝘦 𝘸𝘦 𝘸𝘪𝘯 𝘵𝘩𝘦 𝘸𝘰𝘳𝘬... …𝘰𝘳 𝘸𝘢𝘪𝘵 𝘶𝘯𝘵𝘪𝘭 𝘵𝘩𝘦 𝘥𝘦𝘢𝘭𝘴 𝘢𝘳𝘦 𝘴𝘪𝘨𝘯𝘦𝘥? — I’ve led service teams of 1,100+ and sold at a 9-figure valuation. And still, that decision—𝗵𝗶𝗿𝗲 𝗳𝗶𝗿𝘀𝘁 𝗼𝗿 𝘀𝗲𝗹𝗹 𝗳𝗶𝗿𝘀𝘁?—was always the hardest. I call this the “𝗖𝗼𝗻𝘀𝘂𝗹𝘁𝗶𝗻𝗴 𝗕𝗮𝗹𝗮𝗻𝗰𝗲”. 👈 Get it wrong one way: you waste thousands on unused talent. 👉 Get it wrong the other way: you break promises to new clients. At my previous firm, we were constantly betting: “Will we win these 4 proposals?” ”Should we hire 50 people now?” ”What if we're wrong?” When we were at $70m, a wrong bet could mean over-hiring 100 people, or underdelivering on 4 new large scale clients. The numbers get scarier as you scale. And they’re not just numbers—they’re people who trust you with their livelihoods. So how do you get that balance right? How do you sell and staff with confidence when things are uncertain? 🔑 𝗧𝗵𝗲 𝗞𝗲𝘆 ⇒ 𝗧𝗿𝗮𝗻𝘀𝗽𝗮𝗿𝗲𝗻𝗰𝘆. Meaning: transparency with both our team and our candidates. We learned to (publicly) say: "Here's what we know." "Here's what we don't know." "Here's the bet we're making." When the whole company understood the stakes and uncertainties, we made better decisions collectively than I ever could alone. Truthfully, the consulting balance never stops, but when everyone understands the bet you're making, they become partners in managing the risk. They know where they stand and can decide if they want to stand with you, or without you. Ultimately, you give them the autonomy to choose. And that’s the power of transparency: It creates a culture of choice.

Do you plan to invoice clients for work that was already accomplished? Two financial processes take up a lot of time for your new business: Accounts Payable (AP) and Accounts Receivable (AR). AR is one of the immediate areas I like to look at when consulting with small and medium businesses (SMB). I've found, on more than one occasion, more than a year of profit sitting in a business's AR -- sometimes several years old and uncollectable! What's worse is when the SMB is still doing business with these deadbeats!!! If you plan, in your new business, to bill customers for work performed, it's important to develop AR processes now. That's the focus of this week's Saturday Startup Series. First off, challenge your business model and see if there's a way to collect payment up front for services to be rendered. This means you need to work extra hard to build trust with new clients. Second, sit down with a lawyer and build ironclad contracts that you plan to use with well-thought-out terms and conditions (Ts & Cs). Operating a business on AR without a contract will end in ruin. However, a poorly designed contract could be worse. Include these items in your Strategic Business Plan (SBP). Third, ensure you're looking, at least weekly, at your AR. Looking at the total AR and Days Sales Outstanding (DSO) isn't enough. You need to be able to see how late every single client is on AR. In this, the Devil is in the Details! Share these metrics and your review process in your SBP. Lastly, you need a clear, easy to follow, and legal AR Escalation Process. There's no messing around with this. Once you bill a client, you are legally required to perform certain actions by certain dates. It should include stopping work without pay. If you hope to legally retrieve your money owed, you have to do this right. This process should be outlined in your SBP as well. When I first started out consulting on the side, I didn't have a contract or a process. And I billed for work after it was done. I had a client that I amassed over $30K in outstanding billed work in four weeks. That client never paid, and I still had to pay someone who worked with me out of my pocket. Don't let this nightmare end your business before it ever starts!!! ….. Follow me if you enjoy discussing business and success daily. Click on the double notification bell 🔔 to be informed when I post. #betheeagle

Agencies: Over-hire and you burn cash. Under-hire and you cause burnout. Here’s how to hire the right amount of people: FWIW, neither of the above is sustainable. I know this because I’ve been guilty of both. 99% of the time, this happens because agency owners are making hiring decisions based on feelings, not data. → “We’re drowning in work—hire ASAP.” → “Revenue is slowing down—hold off on hiring.” The problem with this is gut-driven hiring is always a step behind reality. By the time you realize you’re overstaffed or understaffed, you’ve already lost profit, people, or both. So instead of guessing, we built a system that balances our hiring decisions with utilization data. Here’s how the system works: 1/ We track team utilization rate weekly. 📌 Utilization Rate (%) = (Billable Hours ÷ Available Hours) x 100 Billable Hours → The number of hours a team member spends on work that directly generates revenue (client projects, retainers, etc.). Available Hours → The total working hours for that person (e.g., a full-time employee has ~35 hours per week). → If we’re below 70% utilization for three months, we adjust staffing because we’re paying under-utilized people which is killing profitability. → If we’re above 90% utilization, we start hiring because our team is close to being overloaded which will eventually lead to burnout, quality issues, and client dissatisfaction. If utilization rate is is between 80-90% → You’re running efficiently. The sweet spot is generally 85% for an agency if you want fewer people issues, 90% if you’re optimizing for pure profit economics and willing to deal with increased team churn. 2/ We use our sales pipeline to predict staffing needs. → If we have 10 deals in contract sent, we project the staffing demand before those clients close. This prevents the last-minute hiring scrambles that typically lead to bad hires. This system removes emotional decision-making, and replaces it will data-driven decision making. When utilization drops, the math decides if we need to cut. Not emotions. When we need to hire, we already know in advance, so we don’t settle for bad candidates. So if you’re still hiring based on gut instinct, you’re building a reactive business that’ll always have to play catch-up. Try this system out for 3-months and report back.