Professional services economics run on people. A services CFO owns the utilisation and realisation math, understands why WIP and unbilled AR quietly become bad debt, and can design a compensation model that rewards the right behaviour.
Metrics that matter
- Utilisation rate (billable hours / available hours)
- Realisation rate (billed / worked)
- Effective billing rate
- Gross margin per project and per partner
- WIP and unbilled AR aging
- Revenue per employee
Common finance challenges
- Project-level profitability visibility
- Fixed-fee vs. T&M pricing strategy
- Partner and consultant compensation design
- WIP aging and write-offs
- Practice-management system implementation
What to look for in a specialist CFO
- Prior services / consulting / agency CFO seats
- Understanding of project accounting
- Experience with practice management systems
- Partner compensation model design experience
Frequently asked questions
- What's the single biggest financial risk for services firms?
- Silent write-offs. Poorly aged WIP quietly becomes bad debt, and utilisation drift compounds into margin decline before anyone notices.
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