This snappy Earnings Pro-Forma for a Professional Services Firm tool quickly calculates the estimated earnings from the combination of billing rates, utilization and cost structure of your professional services firm will help you analyze these critical components of earnings. The Billing Rate Utilization Matrix adds additional insights and allows you to create a sensitivity analysis using parameters of your choice.
Recently I took part in a webinar hosted by Brian Blalock and BlueGrace Logistics, titled THE CFO: How They Can Be a Change Agent in the Supply Chain. It’s a topic I love for two reasons. First, the supply chain spans all parts of a business and, second, it’s an area where collaboration between the Supply Chain team and finance team can create huge value.
When it comes to FP&A forecasting, most companies base their long-range forecasts on static planning processes, rather than more relevant, dynamic plans that reflect the complexities of the business.
Relying on a forecast that doesn’t enable continuous monitoring of company performance, instead of implementing a modern, rolling forecast approach, is like using an old-school road map to guide you on a cross-country trip: Why use a paper map when you can get to your destination worry-free with a car GPS system?
Rolling forecasts—forecasts that are updated typically on a quarterly or monthly basis—can be a game changer. They allow organizations to better align with their strategy, perform more-effective business analysis, and derive greater ongoing value from their budgeting and planning processes. Rolling forecasts make organizations nimbler, able to seize potential opportunities, or better prepared for upcoming roadblocks.
Where would Amazon be without Jeff Bezos? Microsoft without Bill Gates and Paul Allen? Google without Larry Page and Sergey Brin?
For most organizations, net worth is directly linked to the talent at the company. This value is known as the human capital of the business. Investopedia defines human capital as “A measure of the economic value of an employee’s skill set . . . the education, experience and abilities of an employee that has economic value for employers and for the economy as a whole”.
It’s no surprise that technology-enabled analytics has permeated every area of the business process. Using sophisticated techniques, operating, marketing, sales and financial professionals have been able to optimize their processes to improve efficiencies and positively impact bottom line financial performance.
