Stop the Leak: How to Track Profit Per Client in Your Business

How to Track Profit

Profit isn’t just about revenue.

Yet for many Adelaide SMEs, financial success is measured by top-line growth. Sales targets go up. New clients come in. But profit margins? They stagnate—or worse, shrink.

The culprit? Margin leakage at the client level.

Not all clients are profitable. Some look great on paper but quietly consume more time, energy, and resources than they return. Others are low-maintenance, high-return gems hiding in plain sight.

The key to fixing this isn’t more work—it’s better insight.

This article outlines how South Australian business owners can track profit per client with clarity, eliminate silent losses, and build a business that scales strategically—not stressfully.

Why Client-Level Profitability Matters

Many SMEs operate with a general view of financial performance:

• Revenue is increasing

• Expenses are under control

• Net profit looks reasonable

But those figures are averages. They hide the extremes—the clients who deliver significant profit, and those who are silently costing you money.

Without visibility:

• You may over-service low-value clients

• You might lose great staff to client stress

• You risk scaling inefficiency instead of margin

Tracking profit per client gives you control. It lets you price accurately, invest wisely, and prioritise strategically.

Signs You’re Losing Money on Certain Clients

You may not realise it, but if any of the following are true, there’s likely a profit leak in your client base:

• You say “yes” to work that feels off-brand just to fill the pipeline

• Clients are demanding more than they’re paying for

• Projects frequently run over time or scope

• Your team complains about time pressure, rework, or client complexity

• You’re busy, but cash flow is constantly tight

If you’ve ever asked, “Why are we working so hard for so little?”—you already know the answer.

What Affects Profit Per Client?

There are five major factors that influence client-level profitability:

1. Pricing

Are you charging enough for the value delivered, the complexity of work, and the risk involved?

2. Delivery Time

Does the client’s work consume more hours than scoped—or than average?

3. Resource Cost

Which staff are assigned to the client? Are you over-using senior resources unnecessarily?

4. Scope Creep

Are new requests handled without additional billing?

5. Admin Load

Does the client generate excess communication, revision, reporting or debt chasing?

Profit isn’t just about sales. It’s about what’s left after delivery and overhead.

How to Measure Profit Per Client: A Step-by-Step Guide

Step 1: Identify Key Data Points

Start by tracking the following per client:

• Revenue billed

• Hours worked (broken down by role or team)

• Direct costs (subcontractors, software, materials)

• Payment terms and speed

• Overhead allocations (if feasible)

This can be done via your project management system, time tracking tools, and accounting software.

Step 2: Calculate Direct Profit

Use this formula:

Client Revenue – (Labour Cost + Direct Costs + Allocated Overhead) = Client Profit

Express this both in:

• Total dollar value

• Profit margin % (Client Profit ÷ Revenue)

This gives you a clear snapshot of which clients are profitable—and by how much.

Step 3: Create a Client Profitability Report

Summarise your client base by:

• Top 10 most profitable clients

• Bottom 10 lowest margin clients

• Average profit per client

• Hours spent vs profit returned

Visualise the data using simple dashboards or spreadsheets. This allows leadership to make informed, strategic decisions.

Step 4: Review Monthly or Quarterly

Profitability shifts as scope, pricing, and team capacity change. Track results over time to:

• Identify declining clients

• Review pricing annually

• Understand the impact of different project types

Make client profitability a regular leadership agenda item.

What to Do With Low-Profit Clients

Once you identify which clients are hurting your profit, it’s time to act. That doesn’t always mean letting them go.

Options Include:

• Renegotiating price: Especially if value has increased or scope has crept

• Restructuring delivery: Assign lower-cost staff or introduce automation

• Narrowing the scope: Focus on your highest-value offering

• Raising minimum engagement fees: Filter low-margin work pre-sale

• Offboarding with grace: If the client no longer fits your business model

The goal isn’t to cut clients—it’s to serve the right clients in the right way, at the right price.

Building a Profit-Protective Client Strategy

Client-level profitability is not just a finance function—it’s a growth strategy.

Integrate It Into:

• Sales: Qualify based on potential margin, not just size

• Operations: Plan capacity around profitable work

• Leadership: Make decisions with full financial context

• Marketing: Target the clients you want more of—not just anyone who enquires

This ensures you're scaling the parts of the business that add value, not those that deplete it.

Tools That Help Track Profit Per Client

To implement this well, you’ll need:

• Time-tracking systems (e.g. Harvest, Toggl, Clockify)

• Project management tools (e.g. Asana, ClickUp, Monday)

• Job costing in your accounting system (e.g. Xero Projects, MYOB)

• Dashboards or reporting software (e.g. Google Data Studio, Fathom)

Integration between systems is key—don’t rely on disconnected spreadsheets.

Culture Shift: Make Profit Everyone’s Responsibility

The best-performing firms create a culture where every team member understands:

• How their work impacts client profitability

• Why efficiency matters

• That success is measured by impact, not effort

  
  

  Train your team to care about value creation. Equip them to track time, hold scope boundaries, and communicate proactively.

Profit isn’t just a finance metric—it’s a performance culture.

Final Thoughts

You don’t need more clients to grow profit.

You need the right clients, serviced efficiently, priced strategically, and reviewed regularly.

Tracking profit per client gives you the clarity to:

✅ Protect your margin

✅ Prioritise high-value work

✅ Scale without chaos

📞 Want help reviewing your client profitability and refining your pricing model? Book a discovery session and we’ll walk you through a margin audit and growth plan tailored to your business.