SaaS
Onboarding and custom implementation for enterprise customers can quietly lose money even when subscriptions are profitable.
Finance for SaaSAccounting & Financial Reporting
Project profitability: know which clients and projects actually make money
Knowing the company is profitable isn't the same as knowing which clients and projects are. Without that, underpriced work keeps getting repeated.
When you can't see profit by client or project
Payroll sits in the accounts as one big number. Time tracking lives somewhere else. A fixed-price project quoted at 400 hours takes 650, and nobody knows exactly what it made.
- Payroll not allocated to projects or clients
- Fixed-price overruns you can't quantify
- Large clients that feel expensive to serve
- Pricing decisions without margin data
How project and client profitability tracking works
Profit per client or project comes from connecting revenue, time and direct costs.
- 1
Allocate costs
Assign people costs by time spent, plus direct costs like licenses and subcontractors.
- 2
Build client and project P&Ls
Revenue minus allocated cost, per client or project, every month.
- 3
Reconstruct the past
Use historical revenue and time records to show which types of work have been underpriced.
- 4
Feed it into pricing
Use real margins when quoting new work and renewing agreements.
Profitability in tech business models
MSPs
Profit per client after technician time, Microsoft licenses and security tools, using ConnectWise data set up correctly.
Finance for MSPsIT services & agencies
Fixed-price software projects, utilization and developer cost per project, so you know what work to stop underpricing.
Finance for IT services & agenciesFrequently asked questions
How do I work out what each project costs when payroll is one expense?
Allocate each person's cost using time records, then add direct project costs like subcontractors and licenses.
How do I calculate profit on a fixed-price project that overran?
Take the fixed fee and subtract the actual hours multiplied by fully loaded hourly cost, plus direct costs.
Can an accountant reconstruct past project profitability?
Yes, from historical revenue and time records. It's often the fastest way to see which work is underpriced.
Why can't our accountant tell us which clients are profitable?
Because the accounts aren't set up to allocate costs by client. That needs time data and a different setup.
How does an MSP calculate profit per client?
Agreement revenue minus technician time, licenses and tools used for that client, with ConnectWise data mapped correctly.
Are SaaS implementation projects profitable?
Only measurable if implementation time and cost are tracked separately from subscription delivery. Often they aren't.
What's the difference between project and client profitability?
Project profitability looks at one engagement. Client profitability combines all work for one client over time.
Your company has enough moving parts already.
Start with a clear look at where things stand and what should improve.