“DEI is not a program or initiative. It needs to be interwoven into everything that you do. It needs to be in your hiring, it needs to be in your recruiting, it needs to be in your promotion, it even needs to be in the way that you fire people.” Dr. Cheryl Ingram, Founder and CEO
Diverse City Group is an industry leader on a mission to create inclusive workplaces by providing education, assessment, benchmarking, and strategic planning to increase retention and recruitment of potential hires without facing barriers rooted in bias. A leader in diversity consulting, their vision is to eliminate discrimination and oppression in every institution.
While successful in the field of DEI assessment and consultancy with a rising revenue trend, the company was experiencing a significant cash flow problem. Diverse City hired Tier One Services to figure out why. The services provided by Tier One Services included CFO, Controller, Bookkeeper and curation of the Asana task management system.
The most impactful aspect of their partnership was the analysis of revenue and profitability reports by customer, by engagement, by consultant, and by sector. In addition, Tier One Services looked at their entire system to see how Diverse City obtained profitability information and worked with the COO to receive consultant-level data.
The Tier One Services team created a custom project profitability dashboard, downloading information from timesheets, payroll records, and QuickBooks. The design of this interactive Excel spreadsheet enabled Diverse City to analyze their data effectively. By including graphs and pie charts that are updated monthly in the dashboard, they had a visual representation of their profit and loss numbers by job.
Tier One Services articulated the results of operations in numbers that were discoverable, enabling Diverse City to more fairly allocate risk. Profitability analysis and billing policies brought two discoveries to light. Through analyzing profitability by multiple factors, Tier One Services discovered that the company was paying their consultants an unworkably high percentage of revenues. Handled with care, this revised compensation percentage will be implemented this year.
Diverse City was billing their project-based work in arrears, after all work was completed. However, this structure unfairly placed all of the risk on the shoulders of Diverse City. Furthermore, it put a strain on cash flow, because of course Cheryl was fastidious about paying her consultants in a timely manner. Additionally, this method overlooked the incremental value received by the client. Through switching to a pipeline method of invoicing where certain milestones triggered billing based on time and effort, they accelerated their inbound cash flow and created a more predictable payment stream.
When asked which aspect of the business was most affected by our collaboration, COO Judy Blair responded, “Getting in-depth understanding of how our method of billing was actually a liability and learning how to bill more effectively from the team.”
By creating and maintaining a rolling cash flow forecast and assisting them in evaluating and cleaning up their books, cash flow improved. Judy continued, “Working with Tier One Services helped us live out our mission statement, freeing us up to concentrate on the elements of our business that are most important, instead of putting out budget-related fires. It enabled us to focus on our clients’ needs and what our team needs.”
The team approach provided by Tier One Services let Diverse City know they were in good hands. By getting financial clarity, they could conduct business the way they wanted to. The impact is living out their values with the people who work for them.
“I appreciate that I don’t have to worry about all the little things. We have peace of mind because we know Tier One Services is keeping an eye on our work and they know what they’re doing,” Judy Blair, COO. “It’s important to hire people who are experts at what they do.”