CFO Services for the IT Consulting Industry

CFO Services for the IT Consulting Industry

The IT consulting industry comes with unique challenges related to managing profitability and cash flow. Fractional CFO services can help IT consulting companies manage those pain points and grow their operations.

IT Consulting Industry Pain Points 

  • Managing gross profit. For an IT consulting firm, a large portion of the revenue is generated through employees’ billable time. It can be difficult to properly manage the number of employees and their salaries, administrative costs, the efficiency of billable employees, and service pricing.  
  • Understanding project profitability. Due to multiple ongoing projects and payment depending on project milestones, it can be difficult to fully understand the profitability of each project while it is in work and after completion. 
  • Managing cash flow. The IT consulting industry is often project based, so revenue is inconsistent and companies often face cash flow problems between projects. 
  • Managing inventory. Some IT consulting firms face high inventory costs, which can lead to cash flow issues and mismanaged inventory levels. 

How The IT Consulting Industry Benefits from CFO Services

  • Gross profit analysis. CFOs facilitate understanding of project profitability by creating systems to correctly assign revenue and costs to the appropriate projects. This also helps companies make data-informed decisions related to employees and pricing.
  • Planning for future operations. CFOs provide cash flow reportingbudgeting, and forecasting to help maintain liquidity between projects and create strategies for growth and scaling.  
  • KPI reporting. KPIs such as cash conversion, gross profit margins, ROI, and revenue growth allow IT consulting companies to manage inventory and understand profitability. 
  • Implementation of financial systems. Strong accounting and financial systems contribute to an IT consulting company’s ability to scale and maintain effective oversight.

Sentinel Finance Group’s CFO services help our IT consulting clients successfully navigate industry pain points and effectively grow their companies. 

Sentinel Finance Group is a fractional CFO firm in Kansas City and provides outsourced CFO services and controller services to local businesses.

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