Top Consulting Accounting Software

Wise, easy ways for consulting firm accountants to make the best decisions for their businesses Choosing and implementing a new accounting system whether or not it is enterprise wide is a very challenging task.

Introduction

Consulting companies are also different from product businesses the work is project-based, recognizing revenue can get complicated, and staff time typically serves as the main input. Finding the right accounting software for consulting firms requires a solution that incentivizes around project billing, provides accurate tracking of time and expenses, delivers clean client reporting, and allows you to analyze profitability correctly. This guide will explain features, what to look for when evaluating accounting software, how accountants make the “right” choice (soon-to-be presented in our newest survey), pricing considerations and tips on implementation so that consulting leaders can buy an accounting system that reflects the scale of their practice.

The importance of the right accounting tool

A consulting services firm's financial success relies on the ability to invoice accurately and in a timely manner, capture time efficiently, get crystal clear insight into project margins. The right accounting solution speeds invoice payment, reduces incidents of dispute and helps cash flow while freeing professional services consultants to concentrate on client work, not paper and manual entry. It also supports smart decisions about staffing, pricing and the services offered.

Core features to look for

• Project billing: support for fixed fee, hourly, milestone, and retainer project billing. It should also permit billing rules per a client or particular engagement and auto-generate recurring invoices where applicable.
• Time and expense management: Native or close-integrated time capture means hours effortlessly flow into billing and payroll. Expense capture, linked to projects, supports computing the total cost of engagement.
• Revenue recognition & contract management It needs to manage long-term engagements and phased work breaking out revenue, making adjustments without manual journal entries.
• Client-based profitability - Insight on how much client price (with metrics for project and consultant) need to be charged.
• Integrated processes for payroll and billing: Holistic movement of hours and rates from time tracking to payroll and invoicing eliminates need for redundant data entry and minimizes errors.
• Cash flow and forecast: Get in-app cash visibility and forecasting driven by outstanding invoices and estimated billings to stay on top of working capital.
• Custom reporting and dashboards: Consulting leaders require dashboards that showcase overdue invoices, utilization rates, realization and backlog.
• Security and access control: Secure sensitive client information through role-based user management and data access controls.

Evaluation checklist

• Fit for consulting processes: Match your existing billing and time capture routines, and make sure the tool can satisfy them without extensive customization.
• Ease of use: Consultants need to be able to log time and expenses on-the-go – a few minutes here or there throughout the day, not just at the end of it – to prevent lag time and lost billables.
• Reporting depth: make sure the tool has out of the box reports for utilization/ realization / margin by project, and backlog by client + ability to create your own reports.
• Integration capabilities: Verify that there are divisions out-of-the-box or API integrations of your project management, CRM and banking systems to automate flows of data.
• Scalability: Make sure that the software can accommodate multiple entities, foreign currencies and consolidated reporting if your company is hoping to expand.
• Implementation schedule and resources: Evaluate internal implementation capacity, will external assistance be necessary.
• Support and training: Review the vendor’s onboarding documentation, time of support replies and availability of training tools (for consultants as well as finance teams).

Pricing and cost considerations

Spend is not simply the cost of a subscription. Consider TCO, which includes on boarding, migration, training, customization and continuing support. And don’t forget about the benefits of better cash flow, and reduced admin time — with a modest increase in billing efficiency or collection speed, the cost of implementation can be recouped fast. Determine if you have the budget and long-term requirements for an all-in-one system versus best-of-breed modules that are linked by integrations.

Implementation best practices

• Kick off with a requirements workshop: Get finance, project managers and consultants involved to document workflows and pain points.
• Purge clean data: Clean those client lists, open invoices and historical rates before migrating it can save you from transferring legacy errors to the new system.
• Pilot a small number of projects: Test time capture, billing rules and reports for accuracy by running a pilot. Use feedback to refine configuration.
• Role-based training: Provide specific training for consultants on time entry, project managers on billing rules and finance on month-end processes.
• Phase integrations: Link the accounting and payroll after core billing, timekeeping are solid to minimize project risk.
• Monitor and iterate: Leverage early reports to track utilization, realization, and billing cycle times, then optimize workflows or system settings.

Workflow integration tips

Accounting software shouldn’t be siloed. Hook in to project management to extract budgets and phases for projects into financial system. Integrate with CRM systems so client contracts, and rates are uniform between sales and billing. Automatically reconcile and collect with bank and payment integrations. When integrations are hard, rely on strong handoff processes and ownership to keep data from being out of sync.

Common pitfalls to avoid

• Selecting a system solely on the basis of its accounting capabilities and ignoring time capture and billing complexity.
• Not appreciating the complexity of change management: remember, even minor workflow changes need to be communicated and taught.
• Not addressing reporting requirements: you can’t be in a position to increase profitability unless you have visibility into utilization and margin.
• Migration in haste: rushing incomplete or inaccurate data will create hard-to-unwind problems.

Measurement and continuous improvement

Once it’s in practice, monitor key performance indicators (KPIs), including days sales outstanding (DSO), average billing lag (the time between work performed and invoiced); utilization rate; realization rate; and project margin variance. Take this measurement to fine-tune billing policies, pricing, staff hiring. Always be asking the consultants what pain points they have in time entry and the finance teams where they bottleneck during closing; small process tweaks can lead to outsized benefits.

Conclusion

The right accounting software for consulting firms It’s not about just any consulting software, it’s Business in the black (literally and figuratively) is all about selecting accounting software that best aligns with your consultancy workflows so you can bill projects accurately and bring financial picture into clear focus. Focus in on a solution that makes it easy to capture time and expense, bill rules application automatically, provide rich reporting and work with your project/client systems. With thoughtful assessment, phase-in and measurement, the proper accounting instrument becomes a strategic asset contributing to cash flow, profitability and client experience.