The monthly fee looks healthy
Each managed client pays a monthly fee, invoiced from the PSA or accounts package. On paper, most look fine. But each client also consumes things that are billed to you elsewhere: Microsoft 365 licences through a distributor, endpoint protection and RMM agents per device, backup storage by the terabyte, email security per mailbox, a password manager per user.
Some of that is re-billed. Some is bundled into the managed fee. Some was meant to be re-billed and never was. Engineer time sits in the PSA, and the cost of it depends on who did the work. Nobody has put all of it together per client, so nobody knows which contracts are carrying the others.
Why per-client margin is hard to see
The costs of a managed client are real but scattered. Each system knows its own part, and none of them know the client in the same way.
- Distributor invoices list licences by tenant or customer name, which may not match the PSA company.
- Security and backup tools bill per device or per gigabyte, reported in their own portals.
- Engineer time is recorded in hours, not in cost.
- Bundled tools are included in the fee but still cost you per seat.
- Project work and hardware sales blur the picture if they are not separated.
What not knowing margin costs
| Blind spot | What follows |
|---|---|
| Unprofitable client not spotted | It is renewed on the same terms |
| Tool cost creeping up | Price rises from vendors absorbed without review |
| Bundled tools over-provisioned | You pay for devices or users the client no longer has |
| Engineer time undervalued | Senior engineers' time on small tickets is not seen |
| No basis for pricing | New contracts priced on guesswork |
How you set internal labour rates or allocate overheads is your decision and your accountant's. We use the rates and rules you give us.
How we build the margin view
- Revenue per client from your PSA or accounts package (Xero, QuickBooks or your own), split into managed fees, projects and hardware.
- Time entries from the PSA valued at internal cost rates you set per role or per engineer.
- Tool costs per client from distributor invoices and vendor portals or exports, matched to PSA companies with a mapping table you confirm once.
- Bundled tool counts compared with the client's actual users and devices, to spot over-provisioning.
- A monthly margin per client, with trend, and a breakdown of what drives the cost.
- Alerts when a client's margin falls below a level you choose, or when a vendor cost for a client jumps.
A board meeting with margins on the table
Each month the directors see every client ranked by margin, with the reasons. The client that looks healthy on revenue but costs a great deal in senior engineer time is visible. A client still paying for licences for staff who left last year shows up as a cost line that should not be there. A client who has grown into a bigger security tier without the fee changing is flagged before renewal.
That gives the account managers something specific to discuss: a price review, a scope change, a clean-up of unused licences. And when you price a new client, you can look at similar clients' real costs rather than a rule of thumb.
The margin view also shows which tools are worth their seat cost across the whole client base. If one security add-on costs you per device on every contract but is only bundled into your top tier, you can see what it costs to carry on the lower tiers where it slipped in during onboarding. That is a packaging decision for the directors, made with the figures rather than a feeling that the stack has got expensive.
Signs you need per-client margin figures
- You know revenue per client but not cost per client.
- Distributor and vendor invoices are paid without being matched to clients.
- Engineer time is reported in hours only.
- Contracts are renewed without looking at margin.
- You suspect some clients carry others but cannot prove which.