5 Steps To Improving Profits Without Downsizing Your Workforce
For all Professional Services firms, large and small, their people are their most valuable resource. Unfortunately, they’re also the most costly resource the firm has to sustain.
In an economic climate where many businesses are having to make cuts in order to maintain even the smallest of profits, Professional Services firms are faced with a dilemma over whether they can sustain their current head count and still keep up with client demands and record a healthy profit at the end of the year.
However, improving profits need not solely come down to reducing expense. Instead of simply asking ‘how can we reduce expenses in order to increase our profits?’, your firm could make a significant improvement to its profitability by considering factors such as:
- Can we improve how our team are spending their time?
- Can we improve our process efficiency?
- What is truly contributing to our bottom line?
Whilst asking these questions is always easier than answering them, there are a number of steps that your firm can take in order to plan, manage and deliver more streamlined and profitable projects.
Improve your profits in 5 steps
1. Ensure efficiency in your finance team
As businesses grow, their finance teams typically grow with them. This will drive your costs up and your margins down. Speak to you CFO about ways to ensure your finance team is lean, savvy and able to support your firm’s growth and profitability objectives. Create specialisations within your finance team and ensure efficiency by putting every business process under the magnifying glass. Reducing the time it takes to perform tasks means that your finance team can focus on more strategic activities that add value to the firm.
2. Integrate all of your systems into one
Using a business system that is purpose built for the Professional Services industry is an essential ingredient in reducing inefficiencies and improving profitability. It is difficult to truly get the most value from your team if they are spending too much time wading through disjointed systems looking for the information they need to perform their job. Project based businesses should look to use business systems that completely support their workflow so that you can get complete visibility across your firm and allow you and your team to make better decisions, more quickly.
3. Keep tight control of your project planning and delivery
From scope, to budget, to delivery and billing, it’s important that you are able to manage and control your project and service’s performance. To achieve a more streamlined business and improved profits, firms need to ensure that they have strong Project Management in place. Speak to your COO and Project Manager’s about how you can create efficiencies for staff and ensure that even non-billable hours are being used to the greatest effect.
4. Maximise your staff and resource utilisation
The best way to maximise the return you get from your most precious resource – your people – is to ensure that their time is being spent wisely. Working with your COO and Project Managers, set targets against clear utilisation KPIs and ensure that they always have visibility into who is doing what. Use your resource planning tool to get visibility so that you can ensure everyone is busy and thus reduce the need for costly contractors.
5. Manage your time and expense against set budgets
In order to increase your bottom line, it is important that you don’t exceed time or cost estimates. Using a centralised ERP system, you will be able to accurately forecast and set your budgets. Coupled with visibility of where your team is spending time, you can accurately plan in order to avoid budget over-spends.
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