--- title: Utilisation, budget and margin: the numbers a consultancy should see without a spreadsheet canonical: https://getcyril.com/blog/consulting-utilisation-and-project-margin/ published: 2026-10-12 author: Cyril team language: en --- # Utilisation, budget and margin: the numbers a consultancy should see without a spreadsheet Every consultancy partner asks some version of the same three questions. Are our people busy? Is this engagement on track? Are we actually making money on it? In most small firms the answers come from a spreadsheet assembled at month end: a timesheet export, a list of rates someone keeps privately, the invoices from the accounting package and a column of expenses typed in by hand. By the time it is finished, the engagement it describes is four weeks further along, and the overrun it reveals has already happened. This post explains what each of the three numbers actually measures, walks through a worked example of how a fixed-fee engagement loses margin without anyone noticing, and sets out what to track each week so you see the problem while you can still act on it. ## Three numbers, three questions They are often blurred together. They answer different questions, and each can look healthy while the others do not. **Utilisation is about people.** Billable utilisation is the share of a person's available hours spent on client work that can be billed. Available hours means working hours after leave and public holidays. A consultant with 40 available hours who logs 30 billable hours is at 75 per cent that week. There is no universal right target: it depends on seniority, on how much selling and internal work a role carries, and on the firm. A target set too high tends to produce padded timesheets or burnt-out people, and both corrupt every other number. **Budget burn is about an engagement.** It is the share of the sold budget, in hours or fees, already consumed. On its own it tells you almost nothing. Sixty per cent burnt is fine if sixty per cent of the work is done and alarming if a third is. **Margin is about money.** Margin is revenue minus the cost of delivering it: hours multiplied by each person's cost rate, plus expenses and any subcontractors. You can only calculate it if you know cost rates, which is why many firms report revenue and call it margin. ## A worked example The numbers below are illustrative, chosen to make the arithmetic easy to follow. They are not benchmarks. Substitute your own. **Assumptions.** A fixed-fee engagement sold for $60,000 over eight weeks. Budget of 300 hours. Blended cost rate of $80 an hour across the team, covering salary and overheads. Planned expenses of $2,000. **The plan.** 300 hours at $80 is $24,000 of cost, plus $2,000 of expenses: $26,000 in total. Planned margin is $34,000, or about 57 per cent of the fee. **Week four.** Half the schedule has passed. Half the deliverables are done. The team has logged 190 hours, which is 63 per cent of the budget. **The projection.** If the second half goes the way the first half did, the engagement needs about 380 hours in total. At $80 an hour that is $30,400 of cost, plus $2,000 of expenses: $32,400. Margin falls to $27,600, about 46 per cent. **What it means.** The 80 extra hours cost $6,400 of margin. On a time-and-materials engagement those hours might be billable, if the client agrees. On a fixed fee they are written off. Nothing dramatic happened: no missed deadline, no unhappy client, nothing a status meeting would have caught. The only signal was the gap between hours used and work delivered, and it was visible in week four to anyone who had both numbers in the same place. That is the whole case for seeing these numbers without a spreadsheet. In week four there are options: a conversation about scope, a change order, a different mix of people on the remaining work. At month end, or at the final invoice, there is only the write-off. ## Why the spreadsheet fails The month-end spreadsheet is not wrong because people are careless. It is wrong because its inputs live in four places and change at different times. - **Time** is in a timesheet tool, logged late and sometimes against the wrong engagement. - **Rates** are in a private file, because cost rates are sensitive, so only one or two people can build the report. - **Expenses** arrive with receipts weeks after they were incurred and are allocated at month end. - **Invoices** are in the accounting package, which knows the client but not the engagement phase. Joining them is a job, so it is done monthly. A number produced monthly cannot drive a weekly decision. ## What to track, and how often A short weekly review covers most of it. For each active engagement: - **Burn against progress.** Hours or fees used, compared with milestones or deliverables completed. - **Margin to date and projected.** Using cost rates and the expenses already logged. - **Unbilled work.** Time and expenses delivered but not yet invoiced, especially on time-and-materials work. - **Scope changes.** Anything agreed verbally that is not yet in a change order. For the firm: - **Utilisation per person, over the last four weeks.** Weekly figures swing too much to act on. - **Overdue invoices by client.** A client who pays late is often a client unhappy with something else. Monthly, look at the shape across engagements: which kinds of work, which fee bases and which clients produce margin, and which only produce revenue. ## Common failure modes **Time logged on Friday from memory.** Hours drift to whichever engagement feels most familiar. Daily logging, or at least logging against the task, is the cheapest accuracy improvement there is. **An "internal" bucket that absorbs overruns.** When an engagement runs over, people log the extra time as internal so the project looks healthy. The firm's utilisation falls and nobody knows why. **No cost rates.** Without them, a busy engagement and a profitable engagement look identical. **Utilisation targets that reward padding.** If people are measured on billable hours alone, fixed-fee engagements fill up to the budget whether the work needs it or not. **Expenses at month end.** Travel and subcontractor costs that land weeks late make every margin figure optimistic until they arrive. ## Questions to ask any vendor - Does time count against the budget that was sold, or a separate budget typed in at kickoff? - Can each person or role have both a bill rate and a cost rate? - Who can see cost rates, and how is that controlled? - Do expenses land on the engagement, and does the margin update when they do? - Can I see budget burn next to milestones completed on one screen? - What do you show for utilisation across the whole firm, and over what period? The last question deserves a precise answer, because tools differ most there. We cover the handover that feeds these numbers in [CRM for consulting firms](/blog/crm-for-consulting-firms/), and the wider lifecycle in [how to run a consultancy on one system](/blog/run-a-consultancy-on-one-system/). ## How Cyril approaches it In Cyril, [Projects](/product/projects/) sits on the same graph as the won deal it came from, so time logged counts against the engagement budget that was sold rather than a copy of it. Rate cards hold bill and cost rates, so each project shows its margin, and projects carry their billing type, fixed price or time and materials. [Finance](/product/financials/) reads from the same records. Expenses captured from receipts are categorised to the project that incurred them, and the project's margin recalculates when they land rather than at month end. A completed milestone can draft its invoice for a person to review. How the deal, the project and the invoice connect is set out in [CRM with projects](/product/crm-with-projects/). What Cyril does not do, stated as plainly as the [consulting page](/solutions/management-consulting/) states it: firm-wide utilisation and bench forecasting across a large consultant pool is thinner than a dedicated PSA tool. Treat it as absent. If resourcing a large bench is your central problem, a specialist tool is the better choice. Cyril is also pre-launch, opening to founding members first. ## Common questions ### What is a good utilisation rate for a consultancy? There is no single right figure, and published averages mix firms of very different shapes. Set targets by role: senior people sell and manage, so their billable share is lower by design. Watch the trend per person over several weeks rather than any one week's number. ### How do you calculate project profitability in consulting? Take the revenue for the engagement, the fee or the billable time, and subtract the cost of delivering it: each person's hours multiplied by their cost rate, plus expenses and subcontractors. Do it during the engagement as well as after it, by projecting the remaining hours from the rate at which work is being delivered. ### Is budget burn the same as progress? No. Burn is what has been consumed; progress is what has been delivered. The useful signal is the gap between the two, and it only appears if both are tracked against the same engagement. ### Should consultants see their own utilisation? Usually yes, as a trend rather than a league table. People who can see their own numbers log time more accurately. Cost rates are a different matter and are normally restricted to the partners and whoever runs finance. --- If you want to be among the first to use Cyril, [join the waitlist](/waitlist/).