Professional services financial projections, built on your numbers
A services firm sells time. Its revenue is set by how many billable people it has, how much of their time is billed, at what rate, and how much of that rate it actually collects. Its cash is set by how long clients take to pay. StartupModel builds a projection around exactly those drivers: billable capacity, utilisation, the rate card, retainers vs projects, contractors and receivable days. It covers the P&L, cash flow and balance sheet, with a low / base / high switch and a Checks sheet. Full costs $349; Light costs $149.
It fits consulting firms, agencies, accountancies, engineering and design studios: any firm that bills for people's time.
Download the sample services model before you buy.
How the revenue build works
Billable capacity. The model has two billable employee roles, partners & senior consultants and consultants. Anyone else on the team is overhead. For each billable role:
billable hours = FTE on payroll × available hours per FTE per year ÷ 12 × utilisation.
FTE comes from the hiring plan, so a consultant who joins in month 7 bills nothing before month 7. Contractor hours are a separate input, growing once a year.
Rate card. Each hour is valued at its rate: senior, consultant, or the rate you bill for contractor hours. The whole rate card rises once a year by your rate increase. This gives fees at rate card.
Retainers vs projects. A share of hours is retainer work, billed at the rate card less a retainer discount: the price of predictable volume. The rest is project work, billed at the rate card × realisation, which covers write-downs, overruns and scope you couldn't bill. Set the retainer share to 0% or 100% for a pure project or pure retainer firm.
An illustration with made-up inputs (not benchmarks): one consultant with 1,800 available hours a year at 70% utilisation bills 1,260 hours. At $150 an hour that is $189,000 at rate card, and at 90% realisation $170,100 of project fees.
Cost of delivery and gross margin
The model treats the cost of delivering the work as cost of sales:
- billable staff payroll: salary plus payroll taxes and benefits, with wage growth;
- contractor cost per hour, which grows with wage growth;
- non-rebillable delivery costs as a % of fees (travel, project software, subcontracted extras).
Gross profit is therefore your delivery margin, the number partners actually manage. Non-billable payroll (business development, operations, admin), marketing, software per FTE, office and other G&A sit below it as operating costs.
Cash: the line services firms underestimate
A services firm can be profitable and short of cash at the same time, because it pays salaries monthly but gets paid 30, 45 or 60 days after it invoices. The model applies receivable days to all fee revenue and payable days to the cost of delivery. That is why the cash flow statement and balance sheet matter more here than in most businesses. Lengthen receivable days by 15 and watch the cash low point move.
Metrics the model reports
For each year (Dashboard in Full, P&L sheet in Light):
- billable FTE at year end;
- billable hours, split employees vs contractors, and contractor share;
- utilisation of billable employees;
- fees at rate card, fee revenue, retainer fees and their share;
- realisation vs rate card, effective rate per billable hour;
- revenue per billable FTE;
- billable staff cost and contractor cost per billable hour, so you can compare employee and contractor economics directly;
- gross profit and margin, year-end receivables.
What you get
Full — $349: Dashboard with the scenario selector and metrics; Inputs; monthly detail for hours, fees, delivery costs, overhead, working capital, loan and equity; annual P&L, cash flow statement and balance sheet; headcount plan by role; Checks sheet.
Light — $149: Inputs, P&L with period detail and the services metrics, Checks sheet. Upgrade to Full later by paying the difference.
Before release, every scenario and year is recomputed independently in plain Python and must match the workbook within $1. That covers the statements plus billable hours, billable FTE and retainer fees. The Checks sheet must show no FAIL.
Sample
The sample is a growing firm with partners, consultants and contractors: Full tier, three years of monthly detail, all three scenarios. Try changing consultant utilisation or receivable days and follow the effect through to cash.
Download the sample services model (.xlsx)
Where firms use it
- Bank loans and overdrafts. A lender wants to see that the firm can cover salaries while clients pay on 45-day terms. See financial projections for a bank loan.
- Hiring decisions. What one more consultant does to margin and cash, given the months before they reach full utilisation.
- Pricing. What a 5% rate increase or a bigger retainer discount does to gross margin.
- Partner discussions. Low / base / high cases agreed in one file, instead of three spreadsheets that drift apart.
Common mistakes in services projections
- 100% utilisation. Nobody bills every available hour; holidays, sales and admin come first.
- Rate card as revenue. Realisation and retainer discounts are real.
- Ignoring the ramp of new hires. A new consultant costs salary from day one but bills nothing until they start.
- No receivable days. The P&L looks fine and the bank account doesn't.
- Contractors costed like employees. Different cost per hour, no payroll taxes, different flexibility. Model them separately.
Questions
Does it handle fixed-fee projects? Through realisation: a fixed-fee project that overruns has a realisation below 100%.
Can I model more than two billable grades? The billable side has two employee grades plus contractors. Map more grades onto those two by averaging rates and utilisation.
What if the model doesn't fit my firm? Write to us within 7 days and we refund the full amount.
See also: Projections for accountants and advisers · All custom financial models