Accounting for consulting and professional service firms
A consultancy can have strong utilisation, a healthy pipeline and a full delivery calendar—and still discover that project margins are weaker than expected.
Kurrent handles the accounting underneath the business, then helps consulting founders understand what is happening across projects, labour, margins, WIP, cash and—where the operational data supports it—utilisation and project profitability.
Where profit gets harder to see
On a time-and-materials engagement, additional billable hours may create additional revenue. On a fixed-fee engagement, those hours may create no additional revenue and simply reduce the margin on work already sold.
A team can be highly utilised because demand is strong—or because projects are taking much longer than they were priced to take.
The utilisation number by itself cannot tell you which one is happening.
A firm-wide utilisation result can hide too little junior work, managers doing work that should sit lower in the delivery model, founders being pulled too deeply into delivery, or a mismatch between the pipeline and the people available.
Utilisation should be interpreted alongside project economics, labour mix and the way the work was sold.
The average conceals where capacity is actually tight—or unused.
One engagement may be delivered mainly by consultants with limited senior oversight. Another can repeatedly pull managers and founders into delivery, require rework and use contractors to recover the timeline.
Kurrent does not replace a project-management system. The role is to connect reliable operational data to the financial result where it helps the business make better decisions.
There can be several stages between doing the work and seeing the cash. A problem at any step can leave the business funding delivery for longer than expected.
Growing WIP can mean a billing milestone has not been reached, time is missing, a project has drifted beyond scope, an invoice is delayed or some work may not be recoverable. Those are operationally different problems even though each can create cash pressure.
What the numbers should reveal
Our services
Accounting Managed Finance Planning & Performance
Compare Kurrent servicesCommon founder questions
Financial analysis cannot answer every resource-planning question, but it can show how labour cost, utilisation, project margin and growth interact where reliable operational data exists.
Planning & Performance can analyse project profitability where the business has enough reliable project and labour information to support it.
Kurrent can monitor receivables and, at the deeper service level, incorporate unbilled work into profitability analysis where the source data supports it.
Managed Finance can assess the current position. Planning & Performance can model the effect of the hire on profit and cash under future assumptions.
The compliance fundamentals are similar, but the management questions can be different. Project margins, WIP, labour mix, utilisation, billing timing and receivables matter much more in a people-heavy consulting model.
Sometimes partially, depending on how revenue and costs are recorded. Reliable project profitability often needs time, project or job-management data as well. Kurrent can use operational information alongside Xero where deeper analysis is part of the agreed service.
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