Two speakers explain how their company uses Power BI to track profitability by client and technician. They found that top revenue clients often have negative margins, with one showing -11% gross profit. MSPs must calculate gross margin by client each month or they'll lose money on their biggest accounts.
Inside of our business, we run a pretty robust Power BI instance. And so I can tell you inside of our existing business, profitability by client, technician touching that client, ticket that technician did for that client. And so like when you look at a lot of M&A, you know, like everyone always goes and you get the list of like, who are your top 10 clients? Usually when you end up running the math on the other side of it, your top 10 clients might actually be your top worst clients from a gross margin perspective. Right. We bought a business and their top client, like number 1 on the list, actually had, when we ran it through Power BI, they had a negative 11% gross margin.
We were paying them to do the services and they saw it and they're like, oh my gosh. That's one of the biggest things I encourage my clients and, well, any MSP to do is, hey, if you're not running gross margin calculation by client, by contract every month, you're watching money walk out the door. You see that kind of stuff all the time. It's— they think it's their best client, but it's actually their worst. And you've got to go and fix that. Otherwise you're kind of rowing against the stream.
