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These 5 Reports Will Help Your Consulting Firm Succeed

Since you’re a consultant, chances are you’ve produced a report or two. In fact your consulting firm may dazzle your clients with artfully designed presentations and printouts, chock-a-block with clever analyses, pithy insights, and/or progress updates.

At the very least you’ve summarized your progress on three pages with your logo on the bottom and dessert smudges on the cover. Or maybe that was me.

Either way, the reports you deliver during a consulting engagement inform and direct your client.

Are you taking the time to produce the internal reports that inform and direct the health of your consulting firm?

Whatever aspirations you harbor for your consulting firm, you need to know how you’re performing. That’s how you identify barriers and plan future progress.

The five reports below are mandatory to steer your consulting firm toward a better future, whether your firm has one or 101 consultants.

5 Reports that Fuel Consulting Firm Success

Status Report

Your status report includes key, internal initiatives and client projects. Design your status report to ensure:

  • The right tasks are assigned to the people who will achieve success;
  • You’re aware of hiccoughs, so you can address them before they become major problems;
  • You’re recording your (team’s) successes, accomplishments and achievements.

Pipeline Report

Your pipeline report records your business development activity, results and health. At a minimum, glancing at your pipeline report should tell you:

  • Whether you’re achieving your activity goals (e.g., number of outreach conversations);
  • Your effectiveness at each stage of business development;
  • Your current revenue opportunities at each stage;
  • Your upcoming delivery capacity requirements.

Cash Flow Report

Cash flow is critical to any entrepreneur, and that includes consulting firm owners. If you’ve built significant capacity on the back of one or two, large client engagements, or you’ve bought out a partner, you can find yourself with a cash thirsty consulting firm. Your cash flow report has one, simple job:

  • Predict your cash position over time, so that you can identify and avoid cash crunches.

Utilization Report

Most of the consulting industry misuses the utilization metric. The percentage of hours spent on billable work is misleading and scrutinizing that statistic is counterproductive.

Think of utilization more broadly as a consultant’s ability to generate, manage and deliver revenue. With that in mind, your utilization report suggests:

  • The capacity requirements to deliver different types of projects;
  • The performance of individuals and teams in your consulting firm;
  • The overall capacity of your firm to create value for clients and profit for you.

P&L Report

Presumably, you’d prefer your consulting firm to line your pockets with a bit of cash. Whether you’re fighting for a livelihood that will support your family or you’ve already achieved financial independence, you want a successful, sustainable consulting firm. That’s why you need a P&L report that highlights:

  • Whether you’re operating profitably (and how profitably)
  • Whether you’re under-investing or over-investing in:
    1. Delivery
    2. Client acquisition and maintenance
    3. IP development
    4. Infrastructure and firm health

Optional Report: Balance Sheet

If you’re using software to generate your P&L, that software will also spit out a balance sheet. Easy peasy. Whether or not you need it depends on the size of your firm and your long-term intent.

If you’re striving to build a salable asset, then you need to keep your balance sheet healthy. A firm laden in debt or without clear financial controls is a tougher sell.

Do you use reports to guide your consulting firm? I’d like to hear what you’re doing.

(Quick shout out to my colleague Richard, a consulting firm operations expert who raised this idea while we were discussing recommendations for a boutique practice.)

  1. Dennis Boyle
    January 30, 2019 at 7:22 am Reply

    Great stuff!

    • David A. Fields
      January 30, 2019 at 7:29 am Reply

      Totally agree, Dennis. When I was talking with my colleague Richard, who’s a consulting firm operations wizard, and he mentioned the standard reports he likes to see.

      It jumped out at me that we hadn’t been demanding our clients put these 5 reports in place. (My daily reminder that there’s always room to grow and improve!)

      Let me know how you fare when you start regularly accessing these 5 reports for your own practice, Dennis.

    January 30, 2019 at 7:36 am Reply

    I am very grateful for your advice every month.

    Of course the sale if your book is one of your goals but when I met you here in Brunswick, ME a few years ago I could tell you sincerely want to help folks.

    Many thanks for your generosity.


    • David A. Fields
      January 30, 2019 at 7:51 am Reply

      Most of us in this profession have learned that immense joy and satisfaction comes from helping others succeed. I bet that’s why you’re in the business of advising others, too!

      Also, thank you for the very kind words, Evan. I’m equally grateful that you take the time to read and offer your thoughts as a comment.

  3. Ray Casey
    January 31, 2019 at 12:07 am Reply

    Good stuff. And a quick indicator of awareness and ability. Next question is how quickly can you produce that info and how many people and systems are invovled to get that data?

    • David A. Fields
      January 31, 2019 at 6:23 am Reply

      That is exactly the next question, Ray. Good on you for being the one to raise it. Having realized the power of these 5 reports, a consulting firm should be asking, “What data, exactly, do I need to track? How do I track it? How do I report it? How do I analyze it? and What should I do, based on the analysis?”

      I knew some smart consultant would point to that series of questions, and that smart consultant is you, Ray.

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