Consulting & Professional Services

Industry Context: Big 4 consulting firms and large professional services (audit, legal, engineering consultancies) operate on project-based billing. They often bill monthly or at project milestones, and clients (especially large ones) may delay payment due to bureaucratic processes. Revenue is recognized on projects, but cash collection can lag, leading to high DSO (professional services commonly see DSO 60-90 days). Partners and project managers get involved in collections, balancing client relationship with cash needs, which can be a delicate dance.

Key Challenges:

• High DSO & WIP: Professional services may invest a lot of hours (Work in Progress) before billing, and then wait long to get paid. This can push DSO up. Some consulting firms have DSO > 90 days especially when dealing with slow-paying industries or government clients.

• Decentralized Responsibility: Partners or project leads often are responsible for getting their clients to pay. This means finance has to chase internal stakeholders to chase clients – a fragmented process with less control.

• Client Relationship Sensitivity: Aggressive collection approaches can jeopardize future work. AR teams must be tactful and informed – knowing if there are ongoing sales opportunities or issues with the client is crucial.

• Lack of Credit Visibility: Consulting firms don’t always perform deep credit checks on clients (especially if they’re Fortune 500 or government, assumed “safe”). However, even big clients can have temporary liquidity issues. There’s usually no system to continuously monitor a client’s financial health after the engagement starts.

• Complex Billing Arrangements: In audit and consulting, invoices might be split, adjusted, or tied to acceptance of deliverables. Discrepancies or scope changes can cause disputes that delay payment.

  
  

How Vasul.ai Helps Professional Services:

• Holistic Client Finance View: Vasul.ai can integrate with CRM/project systems to understand project status and pipeline. An AR collector or Partner can see in one view: outstanding invoices, project phase, and any new proposals pending. This context means collection efforts are more informed and conversations can be tailored (e.g., referencing project completion or next phases).

• Credit Risk Alerts on Clients: Even Fortune 500 clients sometimes have credit events (downgrade, restructuring). Vasul.ai pulls credit news – for example, if a client’s credit outlook is revised negatively or their stock tanked – alert the finance team to tighten follow-ups or suggest securing an interim payment. This is a form of early warning system for what might otherwise be unexpected non-payment.

• Partner Collaboration & Gentle Reminders: The platform can be configured to send polite reminders to engagement Partners or client account managers when invoices for their client are overdue, along with recommended actions. For instance: “Client X is 45 days late on a $2M bill. No payment issues flagged previously. Please reach out or let AR team know if you need support.” This spurs internal coordination, ensuring AR isn’t just finance’s job but a shared responsibility with client service teams.

• Improved Forecasting: By analyzing payment patterns of clients, Vasul.ai can help finance predict which accounts are likely to pay late. For example, it might learn that “Client Y (a government agency) usually pays 30 days after invoice approval (which itself takes 30 days)”, so the expected delay is built into cash forecasts, avoiding surprises.

• Case Example (Illustrative): “A Big 4 firm pilot-tested Vasul.ai on a portfolio of 50 clients and managed to cut average DSO from 95 to 80 days. They identified 5 clients with systematic issues (missing PO numbers on invoices, etc.) and fixed those via the insights from Vasul.ai’s tracking. Additionally, early warning on one client’s deteriorating financials allowed the firm to secure payments ahead of a bankruptcy filing.”

• Strategic Impact: For consulting firms, improved cash flow means more cash to invest in talent and strategic initiatives. Reducing the administrative burden on Partners for collections also increases their focus on delivering value (and winning new business).