Software for the person who has to close the month with numbers they trust

Why margin always arrives late, and what actually moves it

The cause is almost never accounting. It is the chain that turns an hour worked into revenue: the consultant logs, the project manager approves, finance invoices. Every link has a delay, and the delays compound.

The breaking point is nearly always the first one. If the timesheet arrives late, everything downstream arrives late, and no improvement in finance recovers that time. That is why the most effective way to shorten the close is to make logging time trivial, not to add controls at month-end.

The second cause is separated systems. If hours live in one tool, contracts in another and invoicing in a third, margin is a reconciliation exercise — and a reconciliation exercise gets done once a month because it is expensive. When the three sets of data live together, margin is a view, and you look at a view whenever you need it.

The six metrics a consulting CFO looks at first

They are not a product company's metrics. In a professional services firm, working capital and capacity are the same story told twice.

The useful question is not what they are worth today, but how late you are seeing them. A correct metric that arrives six weeks late is not information, it is a post-mortem.

• Margin by engagement and by client, not only in aggregate
• Utilization and billable share, to see where the margin comes from
• Work in progress and its ageing
• DSO by client and average days to collect
• Revenue leakage: unbilled hours, discounts, write-offs
• Forecast accuracy, measured against actuals