A Cash Register for the Service Enterprise

Professional services is the cash register for the service enterprise.  But turning a services business into a profit center requires careful orchestration.  Outside of the human element of having great people running your projects, a services business needs a strong project financial framework in place.  The framework assists with management of the day-to-day operations, from enforcing delivery excellence to project reporting and cost estimation.  Project financial controls mitigate the risk of cost overruns, with pre-defined thresholds to protect the budget and the margin.  A strong framework and great people can transform a services organization into a reliable source of positive cash flow.

Enforcing delivery excellence

A profitable practice involves proper management of the project delivery process, management of funds, and the ability to process payment on time.  The ability to invoice quickly lowers the days outstanding in receivables.  Automating billing triggers eliminates accounting headaches down the road and moves the process forward.  Batch billing automatically generates invoices on the pre-defined project parameters such as progress, standard time and materials or retainer blocks.  To ensure the billing engine is a well-oiled machine, project team members must be able to capture their time and expenses easily.  One outstanding timesheet could push an invoice out for days. 

Smart reporting

Better reports produce better project governance and financial controls.  Overproduced data can hinder decision making.  Reports must be easily digestible and usable, with indicators telling you about the health of the program.  Indicators should include: (1) percent complete versus cost to date, (2) budgets versus actuals, (3) resource utilization, (4) risk and opportunities, and, (5) rolling forecast data. 

Reports should have three audiences in mind: the client, implementation team, and management.  Status ...