Case Study: How a Consulting Firm Turned Losses into Profitability with Fractional Accounting

OVERVIEW

For many consulting firms, rapid growth can bring unexpected financial complexity – and without the right accounting processes, even high-revenue firms can slide into unprofitability.

In this case study, you’ll learn exactly how an eight-figure, tech-enabled consulting services firm with a proprietary data analytics product overcame mounting losses, inefficient accounting, and costly compliance issues.

By engaging fractional accounting services tailored to the unique needs of their consulting business, they streamlined operations, cut costs, and turned persistent losses into consistent profitability.

THE PROBLEM

The firm’s books were handled by an outsourced accounting provider that lacked the capacity or capability to offer and implement value-added recommendations. As losses increased, so did accounting costs — with no actionable recovery plan in sight.

Key issues included:

• Overly complex legal structure, inflating overhead costs.
• Lack of standardization across entities, leading to expensive and error-prone financial statement consolidations each month.
• Non-compliance with audit requirements tied to a debt agreement, exposing officers and directors to unnecessary liability.
• Inadequate job costing, leaving the firm in the dark about which projects, if any, were profitable.
• No revenue tracking by jurisdiction, resulting in corporate income tax overpayments exceeding six figures.

THE SOLUTION

Our fractional accounting team with deep experience serving consulting firms stepped in to refocus and optimize the company’s financial operations, prioritizing cost savings, actionable insight, and risk reduction.

We implemented:

• Entity simplification – Eliminated one of three entities, producing significant ongoing savings in administration, licensing, and accounting.
• Standardized chart of accounts – Reduced time to close and lowered errors in financial statement consolidation.
• Audit readiness – Successfully completed the firm’s initial financial statements audit with a clean opinion for the board of directors.
• Expanded time tracking & job costing – Introduced technology and policies to ensure accurate, timely job costing by client and project, uncovering and correcting a systematic mispricing practice driving losses on major projects.

Revenue tracking by jurisdiction – Implemented with the company’s tax advisors, resulting in corporate income tax savings equivalent to nearly 2% of revenue.

THE IMPACT

With structural, reporting, and compliance improvements in place, the consulting firm’s cash position improved dramatically within months.

• Improved cash position enabled expanded investment in technology development.
• Streamlined, accurate reporting freed the CEO to focus on channel development and other high-value growth activities.
• Recurring annual audits became faster and less costly thanks to a clean audit foundation and simplified legal structure.

Sustained profitability was achieved through better job costing, process efficiency, and accurate reporting.

FRACTIONAL ACCOUNTING SERVICES FOR GROWING CONSULTING FIRMS

If your consulting firm is facing rising costs, unclear profitability, or inefficient accounting processes, the right fractional accounting services can help you regain control.

Our team specializes in outsourced accounting for consultants and consulting firms — delivering cost savings, process efficiency, and actionable insights that drive sustainable growth.

Book your free financial risk & readiness assessment today and discover exactly where you can cut waste, improve profitability, and protect your business from compliance risks.