Client Profitability Analysis

Overview

Wilson Tools Used

• transaction_search

  — find all revenue transactions grouped by client/vendor name, and all expenses attributable to specific clients

• spending_summary

  — calculate overhead costs to allocate across clients

Workflow

1. Ask for the analysis period and list of active clients (or detect from transaction data).
2. Use

   transaction_search

   to find all incoming payments, grouped by client name or reference.
3. Use

   transaction_search

   to find all expenses directly tied to each client (contractor costs, materials, software licenses specific to a project).
4. Use

   spending_summary

   to get total overhead (rent, utilities, general subscriptions).
5. Allocate overhead proportionally by revenue share: Client Overhead = Total Overhead * (Client Revenue / Total Revenue).
6. Calculate per-client profitability:

CLIENT PROFITABILITY — [Period]
═══════════════════════════════════════════════════════════
Client          Revenue   Direct    Overhead   Profit   Margin
                          Costs     Alloc.
──────────────────────────────────────────────────────────────
Acme Corp       $15,000   $4,500    $3,750    $6,750    45.0%
Beta LLC        $10,000   $7,200    $2,500      $300     3.0%
Gamma Inc        $8,000   $2,000    $2,000    $4,000    50.0%
Delta Co         $7,000   $1,800    $1,750    $3,450    49.3%
──────────────────────────────────────────────────────────────
TOTAL           $40,000  $15,500   $10,000   $14,500    36.3%
═══════════════════════════════════════════════════════════

1. Rank clients by profit margin, not just revenue.
2. Flag clients with margins below 20% as candidates for price renegotiation or scope reduction.

Without Wilson

1. Export bank transactions as CSV for the analysis period.
2. In a spreadsheet, add a "Client" column. Tag each income and expense row with the client it relates to. Tag overhead expenses as "General."
3. Create a pivot table: Rows = Client, Values = Sum of Income, Sum of Direct Expenses.
4. For overhead allocation, calculate each client's revenue share:

   =ClientRevenue/TotalRevenue

   .
5. Client Overhead =

   =RevenueShare * TotalOverhead

   .
6. Client Profit =

   =ClientRevenue - DirectCosts - AllocatedOverhead

   .
7. Client Margin =

   =ClientProfit/ClientRevenue*100

   .
8. Sort by margin descending. If you use time tracking (Toggl, Harvest, Clockify), export hours per client and calculate effective hourly rate:

   =ClientProfit/HoursWorked

   .

Important Notes

• The hardest part is attributing expenses to specific clients. If you cannot tie an expense to a client, it goes into overhead.
• Time is a hidden cost. A client paying $10,000/month but consuming 80% of your time is less profitable than it appears. Consider tracking hours per client alongside dollars.
• Overhead allocation by revenue share is simple but imperfect. A client generating 50% of revenue but only 20% of support tickets is being over-allocated overhead.
• Use this analysis to decide where to invest sales effort, which clients to fire, and where to raise prices.