KPIs for Consulting Firms
These are the KPIs a consulting firm tracks to keep consultants busy on profitable work and the pipeline full. Utilisation and realisation set margin, and backlog shows how secure it is.
The KPIs to track
Utilisation rate
Billable hours divided by available working hours.
Realisation rate
Value billed divided by value of time at standard rates.
Project margin
Project revenue minus the cost of consultant time and expenses, divided by project revenue.
Backlog
The value of signed work not yet delivered, a guide to how much revenue is secured.
Revenue per employee is annual revenue divided by average headcount, a rough measure of workforce productivity.
Formula and SQL query on the Revenue per Employee page.
Pipeline coverage ratio compares open pipeline value to the quota still left to win.
Formula and SQL query on the Pipeline Coverage Ratio page.
Customer concentration ratio is the share of revenue that comes from your largest few customers.
Formula and SQL query on the Customer Concentration Ratio page.
Days sales outstanding is the average number of days it takes to collect payment after a sale.
Formula and SQL query on the Days Sales Outstanding (DSO) page.
Where the data usually lives
Time and expense tracking, project and resource planning, the CRM and the finance system.
Measurement mistakes to avoid
- Bench time and unbilled business-development time should be defined, or utilisation is not comparable.
- Revenue recognition on fixed-fee projects should follow the work, not the invoice date.
- Pipeline value is not revenue; weight it by stage before comparing with targets.
Questions to ask your data
You can type these as plain questions. SchemaChat turns each one into SQL against your connected database or uploaded file, runs it, and shows the SQL and the figures it used so you can check the answer before you share it. Check that the result matches how your business defines each KPI.
- What is utilisation by consultant and grade?
- Which projects are below target margin?
- How much signed backlog do we have by quarter?
- How dependent are we on our top three clients?