Client Overview

When we partnered with this IT services and consulting firm, the company had an established client base and a solid reputation for delivering tech solutions, but financial management was holding back its full potential:

• Annual revenue of ₹18 Crores
  
• Team of 80+ employees across consulting, project management, and technical delivery
  
• Client base primarily consisting of SMBs and mid-market enterprises
  
• Mixed revenue streams, including time-and-materials, fixed-price projects, and retainer contracts
  

Despite steady revenue, cash flow volatility and inconsistent margins were challenging growth and scalability.

The Challenge

Due to the combination of time-and-material and fixed-price contracts, the company had irregular cash flow as it expanded. Monthly billing was used for time-and-materials projects, while milestone-based invoicing was necessary for fixed-price contracts, which resulted in payment delays and cash shortages.

Project margins were unpredictable due to poor tracking of billable hours, scope creep, and resource utilization.Due to the lack of systematic time tracking, team members were frequently assigned to several projects, which resulted in undercharging and lost billable hours. Due to unforeseen scope changes and the lack of cost pass-through procedures, fixed-price contracts frequently proved to be less profitable.

Leadership was also unable to make timely choices due to the delay in financial reporting. Additionally, the company had trouble allocating internal resource costs between projects, which led to wasteful resource use and margin erosion.

The Solution

At Sharda Associates, we helped implement a comprehensive solution to bring structure, clarity, and predictability:

• Time-tracking systems were introduced for billable hours and resource utilization, linking them directly to client billing
  
• Reworked fixed-price contracts to include proper scope management, cost pass-through clauses, and milestone-based invoicing
  
• Implemented a project-wise profitability tracking system, allowing management to measure margins in real time
  
• Introduced rolling cash-flow forecasts, aligning invoicing schedules with project timelines to ensure liquidity and reduce the impact of delayed payments
  
• Automated financial reporting was set up, with dashboards that tracked profitability, billing, and resource utilization across all projects
  

We also worked closely with management to optimize resource allocation and improve project pricing strategies.

The Impact

• Project margins improved by 22% through better resource tracking and scope management
  
• Cash flow improved by 30% with optimized invoicing and payment follow-ups
  
• Billable hours increased by 18% by tracking utilization more effectively
  
• Decision-making speed improved by 40% with real-time financial data and reporting
  

Conclusion

We helped the IT services and consultancy company grow confidently and profitably by implementing structured financial systems, enhancing project visibility, and optimizing cash flow management.

Sharda Associates’ virtual CFO services can help you take back control and promote long-term growth if your IT services or consulting company is having trouble with project profitability, irregular cash flow, or resource use.