Client Profitability Engine
Know exactly which clients make you money and which ones don't. The profitability engine calculates gross margin per client per month using PSA time entry data and your configured labor rates.
What the engine calculates
For each active account, every month, the profitability engine computes:
Profitability tiers
≥ 60% margin
High-margin, low cost-to-serve clients. Your best clients — protect these relationships.
40–59% margin
Good margin. Standard profitability for a well-run MSP.
20–39% margin
Marginal. Worth keeping but needs review — is there a service line costing more than it should?
< 20% margin
Unprofitable. 'Problem client' flag activates after 2 consecutive months in this tier. These clients are paying you to lose money.
Labor cost calculation
Labor cost uses time entries from your PSA integration. When ConnectWise, Autotask, or HaloPSA is connected, time entries are pulled per client per month and multiplied by your configured loaded labor rate.
The loaded labor rate is your fully-burdened cost per hour — salary + benefits + overhead divided by billable hours capacity. You configure this in Settings → Profitability. You can set:
- Org-wide loaded labor rate (default rate for all team members)
- Per-role rates (technicians cost less per hour than senior engineers)
- Individual overrides if needed
The problem client flag
Accounts that remain in Tier D for 2 or more consecutive months receive a “Problem Client” flag. This appears prominently on:
- The account detail page (warning banner in the header)
- The profitability dashboard (dedicated 'Problem Clients' section)
- The owner/CEO dashboard view
A problem client flag should trigger a conversation about repricing, scope reduction, or in extreme cases, client offboarding.
Service line breakdown
The profitability record includes a service line breakdown — which service categories are profitable and which ones aren't. For example:
| Service | MRR | Labor Cost | Margin |
|---|---|---|---|
| Managed Helpdesk | $4,005 | $1,200 | 70% |
| Managed Backup | $960 | $100 | 90% |
| Network Management | $600 | $800 | −33% |
In this example, network management is unprofitable. The data reveals a conversation: raise the price, reduce scope, or accept it as a loss leader.
Profitability alerts
Configure a margin alert threshold in Settings → Profitability. When a client's gross margin % drops below the threshold in a given month, the assigned AM receives an in-app notification and the account is flagged.
Exporting profitability reports
On the Profitability page, click Export CSV to download a complete profitability report for all clients for the selected period. This export is logged in the security audit log with your user ID, timestamp, and record count.