Backlog first, pipeline second, bank balance last
The bank balance tells a consulting firm where it has been; the signed engagement letters tell it where it is going. We keep a running backlog figure, the fees remaining under signed letters, expressed as months of the firm's overhead and owner pay, and a weighted pipeline beside it, proposals outstanding multiplied by an honest win rate drawn from your own history rather than from optimism. Together they answer the operating questions a bank balance cannot: whether to chase new work now or in eight weeks, whether the next associate is affordable, and how bad a lost renewal would actually be. A Fractional CFO engagement maintains both numbers monthly and rereads them the week a major proposal lands or dies, because that week is when the plan changes.
Pipeline discipline includes what proposals cost. A boutique's largest unbilled expense is usually proposal weeks: partner days spent on RFPs that procurement was always going to award elsewhere. We track proposal effort against wins by client type, which turns bid-or-no-bid from an argument into a policy, and puts a real number on defending the anchor client's renewals versus pursuing new logos.
Enterprise clients pay slowly by design
Boutique consultancies increasingly sell to procurement, not to the sponsor who wanted the work. That means supplier onboarding through portals like SAP Ariba or Coupa, purchase orders that must exist before the first invoice can, milestone acceptance steps that add weeks, and net-45 or net-60 payment terms as the opening position. Almost none of it is negotiable after signature, so the CFO work happens before: payment terms priced into the fee, a deposit or an early milestone placed where the cash gap bites, acceptance emails filed with each invoice, and invoices that match the purchase order's format the first time so nothing bounces back for a fourth week of aging.
Where the gap is structural, a firm permanently carrying two months of enterprise receivables, the honest answer is working capital, and arranging it well is its own discipline. Business Financing Advisory exists for exactly this: Walla's background in banking and corporate finance means the operating line gets negotiated by someone who has sat on the lender's side of the table.
Margin lives in the associate spread
Once a firm delivers through associates, the economics change kind: the owner stops selling days and starts selling the spread between the client's fee and the associate's cost. The CFO discipline is keeping that spread visible for every engagement and letting it drive two decisions. Pricing: the next proposal gets built from what delivery actually cost on the last three comparable mandates, not from what the market supposedly bears. Capacity: an associate converts from contract to payroll only when proven utilization shows a salary would survive the gaps between engagements, because payroll keeps running through the dry spells that contractor invoices politely skip.
The spread also prices rework. A fixed-fee overrun delivered by associates burns cash twice, once in the capped fee and again in the associate's invoice, which is why overruns belong in the monthly margin line while the engagement can still be rescoped, not in a year-end surprise.
Four numbers, one monthly session
The cadence is deliberately small: current numbers from the books, one working session, decisions written down. The dashboard rarely needs more than four lines.
| Number | The question it answers |
|---|---|
| Backlog coverage in months | How long the firm eats if nothing else is signed |
| Weighted pipeline | Whether selling or delivering deserves this month's attention |
| Margin by engagement | Which mandates, clients and fee structures actually pay |
| Largest client's share of revenue | How much of the firm one renewal decision controls |
Concentration deserves the bluntest treatment of the four. A firm whose largest client passes half of revenue is, financially, a subsidiary with extra steps: pricing power fades, terms harden, and one procurement review can empty the backlog. We track the share openly and point strategy at it, which proposals would diversify it, when the anchor renewal falls, and how much cash the firm should hold precisely because of it. The numbers themselves come off the engagement-level books described under consultant accounting; the CFO session is where they turn into decisions. For boutiques across Mississauga and the GTA, scope is quoted in writing after a free 15-minute discovery call, sized to the firm rather than to a package.
