Your biggest client can be your biggest source of work without being your best source of profit. Revenue shows how much an account brings in. Client profitability shows what remains after the work of serving it.
That distinction matters when you have one senior strategist available and three clients asking for more time. A useful account review connects fees, delivery costs and capacity. It also looks beyond a single difficult month before deciding what to change.
Start with a consistent account calculation
For an operational review, define client contribution as fees earned for the period minus attributable delivery costs. Those costs can include employee time at internal cost rates, contractors and client-specific expenses. Keep the revenue period aligned with the work: comparing an annual prepayment with one month of delivery will distort the result.
Client contribution margin is contribution divided by the same period’s fees, multiplied by 100. This is a management measure, not automatically your company’s net profit. Shared overhead still needs to be covered. If your internal cost rates already include an overhead allocation, do not subtract it again.
Use the same method across accounts. Mixing salary-only costs for one client with fully loaded costs for another makes the comparison unreliable.
Count all the work the account creates
Include client-specific project management, meetings, revisions and support, even when the agreement does not let you invoice them separately. A non-billable flag changes how time is charged; it does not make the effort disappear.
Keep that work attached to the client. Moving unpaid revisions into a generic internal project makes the account look healthier while hiding the reason your team is busy.
Review project profitability first if the account contains several projects. One troubled launch can sit beside a healthy recurring service. You want to see both the individual problem and the overall relationship.
Compare margin dollars and constrained capacity
Consider this illustrative monthly review. Delivery costs include all attributable labor and external expenses under one consistent costing method.
| Account | Fees | Delivery costs | Contribution | Margin | Senior specialist hours |
|---|---|---|---|---|---|
| Alder | $18,000 | $12,600 | $5,400 | 30% | 60 |
| Birch | $12,000 | $6,600 | $5,400 | 45% | 20 |
| Cedar | $8,000 | $5,600 | $2,400 | 30% | 10 |
Alder and Birch produce the same contribution, but Alder consumes three times as many senior specialist hours. That is worth investigating if the specialist is your bottleneck. It does not prove that Alder should be dropped: its commitments, stability, growth prospects and the replaceability of the work matter too.
Ask what the next block of work would require. Existing account averages describe the past. An expansion that needs a new contractor or significant onboarding can have very different economics.
Diagnose the cause before changing the relationship
A low margin usually calls for a specific intervention.
- Repeated revisions: review the approval process and the boundaries of each revision round.
- Too much senior involvement: identify decisions that can move to another role with suitable support.
- Small requests spread across the week: agree on a queue and delivery cadence.
- An old price attached to a larger service: prepare a scope or renewal conversation.
- A one-off delivery failure: correct the cause before treating the month as typical.
Use time-entry notes and project records to check the explanation. A total alone cannot tell you whether a meeting prevented rework or created it.
Make the account review a monthly decision
For each account, record the period reviewed, the cost method, the main driver of the result and one action with an owner. Look at several comparable periods where available. Separate onboarding and exceptional recovery work from a recurring pattern without erasing their costs.
At the next review, check whether the action helped. Did revision hours fall? Did the new delivery structure preserve quality? Did a scope adjustment improve contribution without simply moving work into an untracked category?
Time Trakkr’s time and profitability reporting can provide the delivery evidence for this review. Start with the available reporting features, then pair the numbers with your knowledge of the account.
Common questions
Should the lowest-margin client always go first?
No. Margin percentage, contribution dollars, capacity requirements and contractual commitments answer different questions. Diagnose the problem and evaluate a realistic alternative before making a decision.
How often should we review client profitability?
A monthly review is a useful starting cadence. During a troubled project, review delivery costs more frequently. For seasonal work, compare equivalent periods so a predictable quiet month does not look like a permanent problem.
