Service

Profitability analysis: company, clients, projects

I determine which part of the business earns and which is financed by it. Segment accounts reconciled to the P&L to the cent, margin per client and project, shared cost allocated with an explicit key — and a test of whether the conclusion survives a different key.

When it makes sense

Revenue grows while profit stalls or falls — growth without result.
A suspicion that some clients or projects lose money, but nobody can show it.
Before deciding to close a business line or branch, or to change the price list.
A budget for next year that should follow profitability rather than “plus ten percent”.
A dispute between partners or departments over who “really earns”.

How I work

1A ledger export, not a system reportLedger entries for the period (trial balance, journal), time records, a sales register by client. System reports already contain somebody’s assumptions — I prefer to start from the entries.
2Segment accounts reconciled to the centRevenue and direct costs assigned to a client, project or line. The sum of segments must equal the P&L — if it does not to the cent, there is an error somewhere, not a “rounding difference”.
3Shared cost by an explicit key — and a test of the keyManagement, administration, rent and systems allocated with a key that is written down and justified (hours, revenue, number of orders). Then the same with a different key: if a client is unprofitable under every reasonable allocation, the conclusion is solid. If only under one — the conclusion is about the key, not the client.
4Contribution margin, break-even, ratios with a ratingFor each segment the contribution margin (CM I), the result after direct fixed costs (CM II) and its share in covering shared costs. For the whole company — fourteen ratios in five modules with a rating and an indication of which module drags the result down.
5A report with one conclusion per pageA workbook with drill-down from report line to ledger entry, plus a management report: one page, one decision. Not an “80-page analysis” but a few charts with the numbers and the method visible beneath.

What you get

Segment accounts in Excel on live formulas — clients, projects, lines — reconciled to the P&L.
Ratio analysis with a rating and a diagnosis: which module, what cause, which single number to act on.
A management report (PL, EN or FR) and — if needed — a dashboard refreshed monthly from the same model.
A list of decisions with the computed effect: price, service scope, allocation key, a line to close or defend.

Break-even and margin of safety calculator

Frequently asked questions

Is time recording needed for client profitability?

In services — yes, because personnel cost is usually 60–70 % of costs and without records its split is guesswork. A simple register is enough: who, for whom, how many hours a month. If none exists, the first stage is running one for two or three months; in trading and manufacturing you can start without it.

What allocation key for shared costs is right?

The one that reflects what actually consumes the cost: hours for management and administration, square metres for rent, number of orders for logistics. A revenue key is convenient and almost always misleading. That is why I compute with two keys and show whether the conclusion is robust.

What if the largest client turns out unprofitable?

First I check whether it is an artefact of the key. If the conclusion is robust, it is rarely about “firing the client” — more often about a service scope that has grown beyond the contract, or a price not indexed for years. I compute what each option yields before anyone opens the conversation with the client.

How long does it take and what is needed to start?

Two to three weeks from receiving the ledger export, the sales register and — in services — time records. The first week is reconciling data to the P&L and asking questions; the rest is the accounts, the key test and the report.

Let’s talk about your situation

Write a few sentences about the company and the problem. I reply within two working days and the first conversation is free.

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