IndustriesProfessional Services
You sell hours you
have already
spent.
Inventory in a services firm is time, and it perishes nightly. An average utilisation figure hides the two failures that actually cost money — the people who are quietly under-loaded, and the people who are over-loaded until they leave.
Two people have run above ninety-five per cent for three consecutive weeks and two have sat below sixty-five for most of the quarter. The 74% average describes nobody. Resourcing decisions get made against the grid, not the average.
Realisation
A quarter of the work
never reaches
the bank.
Every stage between doing the work and being paid for it leaks, and each leak is invisible on its own. Together they are usually the largest number in the business nobody manages.
Each stage is a different team's problem, which is why nobody owns the total. When time, billing and the ledger all sit in FlowZa Finance, the leak is one report rather than four reconciliations.
What changes
Recognise revenue as
you earn it, not
as you invoice it.
Time posts to the project and the ledger at once
One write, not a nightly export. Work in progress is a real balance you can walk down to a person and an hour, which is what makes revenue recognition an output rather than a monthly estimate.
Write-offs need a reason and an approver
A non-billable hour is a decision. Recording who made it and why turns thirteen anonymous points of leakage into a list of conversations with named clients.
Rate cards enforced where the work is booked
The rate is resolved from the engagement, the grade and the agreed discount at the moment time is entered, not corrected by a finance team three weeks later.
Subcontractors sit on the same margin line
Bought-in delivery is a cost of the engagement, so blended margin is visible per project rather than emerging at year end when the purchase ledger is reconciled.
Scope changes are contract events
A variation updates the engagement value, the forecast and the invoice schedule together. Unapproved scope shows as unbilled work in progress rather than disappearing into goodwill.
Pipeline meets capacity
Weighted pipeline is compared against the actual grid above, so a resourcing decision can be made before the deal closes rather than the week the work starts.
Questions services firms ask
Do you support fixed price as well as time and materials?
Yes, and retainers and capped time and materials alongside them. Fixed price recognises revenue on progress rather than invoicing, which means the percentage-complete calculation has to come from real booked time — that is the reason it usually goes wrong, and the reason it works here.
Will consultants actually fill in timesheets?
More of them, sooner, because entry happens against the work they already have open rather than in a separate system on Friday afternoon. We do not claim to solve this completely. The six points of unrecorded time above is a realistic figure after deployment, not zero.
Can we keep our practice management tool?
You can, but it reintroduces the export between time and the ledger, which is where realisation goes missing. Most firms move it because the reconciliation was the cost they were trying to remove.