SECTORS
Consulting firm

How can a consulting firm deal with cash flow challenges?

Consulting firms face unique challenges when it comes to cash management. In this article, we start by looking at the problems encountered by consulting firms, then discuss the most appropriate solutions for optimizing cash management.
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Consulting firms: key points to remember about cash management

Cash management is a key issue for consulting firms, whose business model is based on highly human-intensive intellectual services and inherently irregular revenue streams. Tensions arise from a structural imbalance between immediate salary costs, project cycles, and deferred payments:
Significant gap between invoicing and payment, with customer payment terms exceeding 60-90 days
Unstable and intermittent income linked to one-off assignments and periods of inactivity
Weight of intangible investments (training, certifications, development)
Dependence on billing rates directly impacting cash flow
Fygr enables consulting firms to manage their cash flow with precision by linking their sales pipeline, current projects, and financial projections.

The specific cash flow challenges for consulting firms

Why is cash management particularly difficult for consulting firms? We have identified three major issues.
The critical gap between invoicing and collection
The inherent instability of income
The weight of intangible investments

The critical gap between invoicing and collection

In the consulting sector, the economic reality is characterized by a significant structural gap between the completion of assignments and their actual payment.

Firms must advance the full cost of services—mainly highly skilled human resources—before receiving any payment.

This phenomenon creates constant pressure on cash flow, as consultants are paid monthly while clients may have extended payment terms, sometimes exceeding 90 days.

The inherent instability of income

The consulting industry is built on a fundamentally volatile and unpredictable revenue model.

Each assignment is a unique project, with varying durations and financial volumes, generating highly irregular cash flows.

Consultants can alternate between periods of intense activity and periods without income, creating constant financial stress. This instability makes it particularly difficult to forecast and manage financial resources.

The weight of intangible investments

Consulting firms must constantly invest in the development of their human resources—training, certifications, skills development—without necessarily having the guarantee of an immediate return on investment.

These intangible investments, which are essential to competitiveness, represent a significant cost that directly impacts cash flow.

The ability to finance these developments without undermining financial stability is becoming a major strategic issue, particularly for medium-sized organizations.
BEST PRACTICES

Best practices for cash management in a consulting firm

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Mastering the precise monitoring of missions and their profitability

The financial management of a consulting firm relies primarily on the ability to accurately track the profitability of each assignment. This approach requires comprehensive tracking of time spent, associated costs, and revenue generated by each project. Consultants must systematically document their work, detailing billable hours, deliverables produced, and results achieved for the client. This tracking provides a detailed understanding of the economic performance of each assignment, identifies the most profitable projects, and allows pricing strategies to be adjusted accordingly. Particular attention must be paid to differentiating between billable hours, productive non-billable hours, and time spent on business development or training.

Anticipating and managing consultants' downtime

The specific nature of consulting lies in the variability of the workload and potential periods without assignments. Proactive management of these intervals is crucial to maintaining the firm's economic performance. This involves developing a strategy of versatility among consultants, training them in different areas and preparing them to work on a variety of assignments. Building a broad portfolio of skills reduces periods of inactivity and maintains an optimal billing rate. At the same time, it is essential to build up financial reserves to absorb these slow periods and to actively monitor the market to identify new assignment opportunities.

Professionalize the management of customer cash flows

The financial performance of a consulting firm depends heavily on its ability to effectively manage financial relationships with its clients. This requires a professional approach to contracting, with clearly defined payment terms, precise project milestones, and transparent billing procedures. It is recommended to implement proactive reminder processes, with automatic reminders before the due date and clear communication in the event of late payment. Diversifying the client portfolio also helps reduce financial risk by avoiding excessive dependence on a limited number of clients. Particular attention should be paid to qualifying prospects and assessing their financial health before committing to an assignment.
CHOOSE FYGR

Why use Fygr for a consulting firm?

The solution for optimizing your cash flow management: use specialized software such as Fygr. We already count numerous consulting firms among our clients, so we fully understand their challenges. As such, we have already carried out numerous custom developments for them to ensure complete customer satisfaction in this segment.
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GOOD REASON #1

Automatic bank synchronization

Track your payments, categorize your consulting income, and anticipate your cash flow effortlessly.
Real-time tracking of payments received by type of assignment
Automatic categorization
Anticipation of cash flows related to billing cycles
GOOD REASON #2

Customized cash flow forecasts

Simulate your development scenarios and secure your growth
Projection of financial requirements based on the sales pipeline
This is the defaultSimulation of the impact of recruitment and investment in training text value
Anticipating downtime and managing resources
GOOD REASON #3

Comparative analysis forecast/actual

Build your development with 360° visibility
Dynamic assessment of the sustainability of new projects
Financial preparation for cycles of expansion and transformation
Rapid detection of performance gaps and levers for improvement

They chose Fygr

Here's what some of our customers have to say after choosing Fygr to visualize their financial data:
After initially testing it on the firm's files, in connection with RCA forecasts, I was impressed by how easy the platform was to implement and use.
Stéphane Albinet
Certified Public Accountant @ SOGEC Accounting Firm
Cash flow is often what makes the difference between a company that weather the storm... and one that gets hit hard.
At Altyma Management, we help leaders plan ahead, manage, and secure their cash flow every day with the right tools, like Fygr, and a strategic vision.
Because having a good cash flow plan means you can make decisions with peace of mind.
Thomas Desnot
Expert outsourced CFO, Founder @ Altyma Management
I recommend FYGR software 1000%... Easy-to-use tool, enriched data in real time, simplified categorization of flows. I went from 2 days of work to 30 minutes for a client on their cash flow monitoring. In short, I approve. And the investment feature is clearly a plus. Onboarding and data entry are really simplified.
Bertha Malafa
Outsourced Chief Financial Officer @ DAF EXPERTISE ET CONSEILS
FAQ

Everything you need to know about cash management for consulting firms

Answers to the questions you ask us most often.
How to choose cash management software for a consulting firm?
To select the right software, first identify your specific needs: assignment management, consultant tracking, billing complexity. Choose a solution that can handle variable workflows, track margins by project, and synchronize multiple entities. Make sure the software allows for detailed tracking of billable hours and predictive resource analysis. The ability to manage different types of billing (daily, flat rate) is also crucial for a consulting firm.
What are the advantages of cash management software over Excel for a consulting firm?
Cash management software offers complete automation of processes specific to consulting firms. Unlike Excel, it enables precise monitoring of margins per consultant and per assignment, automatic synchronization of bank data, and immediate detection of late payments. Dynamic dashboards facilitate strategic decision-making, while business development simulation functions become a real asset for management.
How to produce reliable cash flow forecasts for a consulting firm?
Forecasting requires accurate collection of historical data on assignments, taking into account the seasonality of consulting. Analyze your consultant billing rates, integrate intermission periods and training investments. Build differentiated scenarios that take into account project variability, specific payment deadlines and potential new contracts. Regular updating based on the order book is essential.
How long does it take to set up cash management software for a consulting firm?
Implementation time varies according to the complexity of your organization. For a consulting firm, it can take from a few days to a few weeks, mainly due to the need to integrate multi-project and multi-consultant data. Importing historical data, synchronizing the various accounts and setting specific invoicing rules are the most time-consuming stages.
How much does cash management software cost for a consulting firm?
Prices vary according to the size of the firm and the functionality required. You should expect to pay between €100 and €500 per month for a solution tailored to consulting firms. The price depends on the number of consultants, the number of bank accounts and the level of reporting required. The investment must be weighed against the productivity gains and improved financial management.
Who are the competitors in the consulting firm treasury software market?
Fygr's main competitor is Agicap. The latter is often described as more expensive and more complex. It is therefore suited to organizations with very specific needs that are not afraid of complicated systems. For a more affordable tool with less friction, choose Fygr.
How do I know if my consulting firm needs cash management software?
Several signs point to this: difficulties in accurately tracking profitability by assignment, significant time spent on Excel spreadsheets, lack of visibility on financial flows, increasing complexity of project management. If your firm has more than 5-6 consultants or sales in excess of €500K, such a tool becomes strategic.
What features are essential for a consulting firm?
Key features include billable hours tracking, margin analysis by project and consultant, expense claim management, cash flow forecasting with development simulation, and multi-entity consolidation. The ability to generate detailed reports and anticipate slack periods is also crucial.