Finance: the numbers

**Profitability was the only KPI to rise in 2022 – indicating a need for tighter revenue and margin planning.**

In 2022, profitability rose to the highest level since 2018, whilst every other financial KPI went down. The difference between the lower performing firms (Level 1 and 2) and the top performing firms (Level 4 and 5) is significant. Much of this is due to better service delivery.

Maturity makes the difference

As you’ll see from the table opposite, maturity in finance and operations has a significant impact on all major financial KPIs.

SPI highlights annual revenue per billable consultant for scrutiny. It’s the single strongest predictor for profitability, and there’s a $194 difference between the most and least mature businesses.

On top of these strong financial indicators, the research also shows that organizations who achieved their revenue targets had lower attrition rates, reflecting financial stability and an ability to both reward good performances and reinvest in their business.

Days sales outstanding (DSO), another of the most important financial KPIs in the sector, increased on average in 2022 to 46.8 days from 43.5 in 2021. This acts as a powerful indicator of operating controls, but also client satisfaction (as indicated by their willingness to pay invoices) and client creditworthiness.

Strong financial performance demands strong financial tools

High-performing organizations have moved away from the old trend of managing based on out-of-date data via Excel spreadsheets. They’ve placed a great deal of emphasis on building a strong financial application infrastructure. This enhances visibility and management control, ultimately resulting in higher productivity and profitability.

ERP (or CFM, as this report calls it), collects and manages all financial information to provide reporting and visibility into total service revenue, cost, and profitability. Visibility is particularly important here. The rewards are significant for organizations who have integrated systems and management dashboards that allow them to pinpoint issues and spot trends in real-time. They can make decisions more quickly, and respond proactively to market changes.

The ability to seamlessly integrate the system of record for managing resources and projects and financial management solutions that govern payroll, expenses, invoicing, and revenue recognition, and project accounting is also cited as critical.

In line with this, CFO interviews reveal the top selection criteria for business applications includes powerful yet easy to use reporting capabilities with mandatory mobile access.