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01 Jul, 2019

Event Recap: Understanding Firm Financials

Rebecca Starer

Event Recap  
Blog Types

Read time: 1 minute, 29 seconds

Christine Hurt, CFO at Ayers Saint Gross, presented to SMPS DC on a topic that many of our members are unfamiliar with, yet a topic that is crucial to understanding how to add value to our firms – financials. For over 30 years, Christine has been managing accounting, HR and IT functions in the built environment. Her intricate knowledge of the ins and outs of financial statements, expenses and metrics gave our members a well-rounded look at how we can impact our firm’s financials.

Whether attendees aced their college Accounting 101 class or slept through it, they left the session with a fresh perspective on financials. Christine began by describing four statements that are important to understanding the financial health of your firm:

Balance Sheet: A snapshot in time of what your company is worth

Income Statement: Financial health of a firm over a period of time

Cash Flow Statement: Outlines the sources and uses of cash

Notes: Helps investors fill in the qualitative gaps of financial statements

Understanding each financial statement and its individual line items is the first step in helping your firm reach its financial goals. The next step? Tracking the right metrics and key performance indicators. Below are a few to keep in mind:


• Current Ratio: This should be at least 1:1. It indicates how well the company can pay current obligations.

• Total Staff Utilization: Measures how well the company manages employee time. Are they spending their time with billable work? Or are they more interested in Marie Kondo-ing their office?

Key Performance Indicators (KPIs)

• Win rates

• Percent repeat work

• Cost of pursuits

Monitor these KPIs against not only internal benchmarks, but also industry standards. Once you’ve begun tracking them on a regular basis, don’t let them sit in an excel spreadsheet or quarterly report. Review them and if you’re not meeting your goals adjust your actions. Is your win rate too low and number of submittals too high? Maybe it’s time to revisit your go/ no go process. Ultimately, Christine made it clear that there is no limit to the amount of value you can add to your firm once you understand financials!