Insights
Profitability5 min read
Busy is not the same as profitable
You know how much you sold. Do you know how much you kept? Three places margin hides in a busy company.
Written by: Asaf Moalem · 18 years in corporate finance
The full calendar trap
A full order book feels like success. It is often the reason profit is flat: every sale carries costs nobody attributes to it.
Where margin hides
Margin hides in three places. Discounts given to close the month. Payment terms that turn a 30% gross margin into a 60-day loan. And the small clients that take as much service as the big ones.
The one report to build
Build one report: gross margin by client, after discounts, after the cost of the time you spend on them. Sort it. The bottom fifth is usually the conversation you have been avoiding.