When we first partnered with this mid-sized IT services company, the business showed strong operational traction:

  • Annual revenue of ₹25 Crores
  • 20% operating margin
  • Team strength of 100+ engineers and consultants
  • Mix of fixed-price, retainer, and time-and-material contracts
  • Long-standing domestic and international clients

Despite growth, financial systems had not evolved with scale.

The Challenge

As the company expanded, cash flow stress began surfacing despite profitability. Due to manual billing, mismatched milestones, and inadequate follow-ups, client payments were delayed by 45–60 days. Ad hoc fund movements were necessary due to the liquidity pressure caused by monthly payment obligations.

There was no real-time financial visibility. Project-level margins were ambiguous, MIS reports were weeks behind schedule, and decision-making by leadership was based on past data. Revenue forecasting was incorrect since key SaaS and services KPIs, such as Monthly Recurring Revenue (MRR), Annual Recurring Revenue (ARR), churn, and Customer Lifetime Value (CLTV), were not monitored.

Due to underutilization on fixed-price contracts, unbilled scope creep, and inadequate tracking of billable versus non-billable hours, margin erosion went unreported. Reactive GST reconciliations resulted in input credit inconsistencies and concerns about compliance. Due to the fragmented financial data, the company was also unprepared for bank and investor due diligence.

The Solution

At Sharda Associates, we helped bring structure and certainty.

  • Real-time MIS implementation with project- and client-wise profitability
  • created dashboards that monitor margins, utilization, churn, MRR, and ARR.
  • Automated billing connected to milestones and contracts
  • GST reconciliation procedures and rolling cash-flow projections were implemented.

Additionally, we collaborated closely with management on methods for attrition reduction, price discipline, utilization optimization, and investor-ready financial reporting.

The Impact

  • Faster collections resulted in a 30% improvement in cash flow.
  • With improved pricing and retention, MRR rose by 25%.
  • Controlling costs and utilization increased profit margins by 15%.
  • Real-time data increased decision-making speed by 40%.

Conclusion

We assisted the organization in transitioning from reactive firefighting to confident, scalable growth by implementing financial discipline, visibility, and predictable revenue mechanisms.

Sharda Associates’ virtual CFO services can help you build your IT services company with confidence and control if you’re having trouble with cash flow, margins, or financial clarity.