By Yaw Ananga and Heather Joyner
From payroll crisis to profit
Business profile
- Industry: Professional Services
- Sub-industry: Civil Engineering, Landscape Architecture, Surveying, Urban Planning
- Location: Arkansas
- Starting revenue: $2,279,000
- Ending revenue: $2,613,000
- Revenue growth: $334,000 (14.7%)
- ROI multiple: 1.85x
| Problems: – Nearly missed payroll due to $2M in uncollected AR – Senior leadership failed to submit time sheets; no invoicing for almost a year – No standardized operational processes or performance metrics – Projects exceeded budgets with no tracking or accountability – Leadership team hadn’t met face-to-face for over 18 months – Underutilized ERP system with no meaningful financial reporting | Solutions implemented: – Weekly leadership meetings and accountability framework – Six core SOPs covering time sheets, invoicing, AR collection, and project reviews – Firm-wide and role-specific KPIs (utilization, DSO, change orders) – An 8-week cash projection system plus a shift to monthly billing cycles – Utilized existing ERP system for project tracking and financial visibility – Semiannual performance reviews tied to measurable outcomes | Results: – Revenue increased by $334,000 (14.7%) – Stabilized payroll and eliminated cash flow crisis – Recovered a substantial portion of $2M in aged receivables – Established systematic monthly invoicing, replacing 12-month billing gaps – Achieved firm-wide time sheet compliance and project budget tracking – Restored leadership alignment through weekly strategic meetings |
1. About the business
This mid-sized professional services firm specializes in civil engineering, landscape architecture, surveying, and urban planning. The firm serves developers, municipalities, and institutional clients throughout the region.
The firm had spent decades building a reputation for quality work and maintained strong relationships with recurring clients. Under the surface, though, the business was failing. A collegial culture turned into complacency. Accountability had disappeared. Financial management consisted of reacting to problems after they’d already spiraled out of control.
By 2023, the firm was days away from missing payroll. The problem wasn’t a lack of work. Leadership had simply failed to invoice clients for nearly a year. Approximately $2 million sat in uncollected receivables. There was no cash management system. The organization was on the verge of collapse, and technical expertise couldn’t save it.
2. Initial challenges of this professional services engineering firm
Senior leadership had stopped submitting time sheets, which brought invoicing to a halt. Project managers were unable to monitor budgets, and the firm lost visibility into utilization and profitability. Employees worked with minimal oversight and without clear expectations.
The leadership team hadn’t held a formal meeting in over 18 months. Several partners owned the firm, but they held different priorities. One didn’t care about financial results. Others were frustrated but avoided confrontation. Culturally, the company was warm and collaborative, but no one wanted to enforce standards or have difficult conversations.
The professional services firm had no documented processes. Projects exceeded budgets regularly because there was no tracking system to catch problems early. They had invested in ERP software, but it mainly sat unused and wasn’t configured to generate meaningful financial reports.
Billing had become chaotic. Monthly invoicing had devolved into sporadic milestone-based billing, or sometimes no billing at all. Nearly a year of work sat without being invoiced, creating a $2 million accounts receivable backlog that now threatened payroll.
3. Cogent’s strategic solutions
Cogent Analytics started with cash stabilization, then built operational standards and an Accountability Framework.
Emergency cash stabilization
The priority: make sure payroll got paid. That meant collecting on the $2 million in aged receivables.
The office manager became the key partner in this effort. Together, the team identified every outstanding invoice and prioritized them by age and amount. Then, we built systematic follow-up protocols, and partners made collection calls on their key accounts. The firm recovered enough aged receivables to stabilize cash immediately.
We built an 8-week cash projection model that showed exactly what was coming in and what was going out: payroll, vendor obligations, and partnership buyouts. The model is updated weekly. It established minimum cash reserves and maximum acceptable outstanding receivables.
The professional services firm switched from irregular milestone billing to mandatory monthly invoicing. This forced discipline around time sheet submission and project tracking, creating a predictable cash flow.
Six core SOPs for professional services firms
Cogent helped develop six Standard Operating Procedures that turned chaos into routine:
- Proposal tracking and project initiation standardized the process for new projects entering the ERP system. Every project now had assigned budgets, clear milestones, and designated responsibilities from day one.
- Time sheet submission and approval required weekly submissions for the project manager’s review before payroll processing. Time sheet compliance is tied directly to the ERP system.
- Invoicing protocols defined monthly billing cycles and approval workflows. Quality checks were conducted before invoices were sent to clients.
- Accounts receivable collection and follow-up created aging reports and assigned collection responsibilities. The procedure established when and how to escalate past-due accounts.
- Monthly project financial reviews required project managers to compare the budget to actual performance every month. They had to identify variances and document corrective action.
- Financial reporting standardized monthly packages for leadership review. These included P&L statements, cash flow analysis, AR aging, and KPI dashboards.
These SOPs replaced ad hoc practices with systematic discipline.
KPIs and performance measurement
We implemented the following firm-wide metrics:
- Utilization rate targeting 75% for billable staff
- Days Sales Outstanding targeting 45 days
- Change order tracking
- Non-billable time tracking
- Project budget performance
Every position agreed on role-specific KPIs matching their responsibilities. Project managers, engineers, and support staff all had tailored metrics. These fed into semiannual performance reviews, replacing the informal feedback that had passed for evaluations.
Leadership and communication– A cornerstone for professional services
The leadership team started meeting weekly to review financial performance, operational progress, AR status, and overall challenges. These meetings rebuilt communication and forced accountability among partners.
KPI dashboards became visible across departments. Weekly team check-ins provided continuous feedback and quick course corrections.
We reconfigured the ERP system to support these new processes. Project setup, time tracking, budget monitoring, and financial reporting were integrated into daily work instead of sitting as separate administrative tasks.
Performance expectations were clarified at every level. Everyone understood what was required of them and how their work would be evaluated. They understood how their work contributed to the firm’s success. The culture stayed collegial, but it now carried professional standards and real accountability for poor performance.
4. Operational Results
The firm moved from crisis to stability in weeks, then from stability to growth over the following months.
- Time sheet compliance went from inconsistent and missing to weekly submissions across the board.
- Invoicing went from irregular to monthly.
- Project budget tracking went from nonexistent to monthly variance reviews.
- Leadership meetings went from zero in 18+ months to weekly without fail.
- Performance reviews went from informal and subjective to semiannual and KPI-driven.
The 8-week cash projection eliminated surprises. Leadership could confidently meet payroll, vendor obligations, and partnership commitments.
Employees responded well to increased transparency and regular feedback. Objective performance standards replaced favoritism. Morale improved.
Regularly scheduled leadership meetings and visibility across departments improved communication and problem-solving. Partners who’d been disengaged started participating in firm management again.
Monthly financial reviews let project managers catch budget overruns early and fix them, improving both profitability and client satisfaction.
The office manager, who’d been fighting these battles alone, finally had systems and support. She sustained the improvements through consistent attention to billing and collections, as well as adhering to processes.
Business development remained a weakness. The firm still relied heavily on recurring institutional clients. The leadership team struggles to implement proactive business development despite the improved operational foundation.
Remote oversight of one office location challenged implementation and required extra attention in order to maintain standards across locations.
5. ROI and financial impact
Revenue grew $334,000 (14.7%), delivering a 1.85x return on investment.
This occurred during crisis recovery, not as part of a growth initiative. Before engaging with Cogent Analytics, the firm was at risk of missing payroll due to a year of unbilled work. The $334,000 in revenue growth came from operational improvements: consistent billing, better project tracking, and improved capacity utilization.
Beyond measured revenue growth, the firm recovered a substantial portion of the $2M aged receivables and avoided payroll failure and potential collapse. They eliminated financial surprise through developing an 8-week forecast and improved project margins through monthly variance tracking.
The engagement with Cogent also delivered systems that generated value for this professional services firm:
- Six documented SOPs
- Firm-wide KPI infrastructure
- Weekly leadership cadence
- ERP system optimization
- Performance management framework
The firm went from operational chaos to disciplined management with systems built to support continued growth. Over the coming months, projections indicate that the firm will realize additional ROI with maintenance of the new systems and processes.
