Find out which client makes you the biggest profit or which one you’ve given most discounts. It’s important to compare clients based on several different metrics rather than just turnover (although Costlocker has that, too…).
Understanding the different financial metrics
Profit margin – the ratio between the Profit and the Revenue. In other words, it tells you how much of every invoiced $ is left as profit.
Profit – whatever’s been left after subtracting the Costs from the Revenue. (This is still a different metric than your accountant can tell you, as it includes your overhead costs.)
Revenue – the total revenue of all your invoiced client projects
Costs – how much your people’s work cost you on all finished client projects (i.e. your worked hours costs), combined with how much you had to pay for external expenses.
Lost revenue – how much you could have invoiced on top of your Revenue, if you invoiced the client for all the hours worked on top of the budget (i.e. on top of the total tracked time).
Discount – your total discount on all of the projects for a particular client
See which client made you the biggest profit
You won’t learn which of your clients is the most profitable from your accountant. Yet you may be surprised how small your profit can be on a client that’s critical for your business when it comes to turnover. This is not unusual, and these are the most common reasons:
maybe your rates for that client are too low when compared to other clients
maybe you’ve done lots of extra work for free (tenders, client care,…)
maybe you don’t seem to estimate your time correctly for that client
Getting to the bottom of these issues can make or break your business – that’s why you should spend your time inspecting your client projects by simply clicking their names and looking at the finished project list to see which projects show small or negative profit.
See your total client discounts
Maybe it’s not that easy to look up all of the discounts on all projects for a particular client during the last, say, 6 months. It is easy with Costlocker, however. Just set the time period using the from / to fields and you’re set.
Compare clients based on how much care they cost you
First, read how to watch expenses associated with client care and learn how to filter out the time you spent on (non-billable) client care. Maybe you’ll realize that it’s too much and that you need to discuss an account fee or increase your rates.