Professional Services & Consulting
Consulting Firm Utilization & AR Velocity Case Study
Eliminating unbilled WIP inventory and accelerating client invoice settlement across 400+ active engagements.
1. Commercial Context
Operating in the Professional Services & Consulting sector requires balancing competitive credit extension terms against ongoing treasury cash flow requirements.
2. The Numbers & Worked Arithmetic
Gross Credit Revenue: $12,500,000
Average Accounts Receivable: $1,450,000
Computed Collection Period (DSO) = ($1,450,000 ÷ $12,500,000) × 365 = 42.34 Days
Average Accounts Receivable: $1,450,000
Computed Collection Period (DSO) = ($1,450,000 ÷ $12,500,000) × 365 = 42.34 Days
3. Strategic Takeaways
By enforcing 14-day automated dunning reminders and offering 1.5% early payment settlement discounts, receivables collection speed improved by 22%, unlocking over $800,000 in liquid working capital.