{"id":10296,"date":"2018-02-21T15:21:00","date_gmt":"2018-02-21T20:21:00","guid":{"rendered":"https:\/\/www.sage.com\/en-us\/blog\/?p=10296"},"modified":"2026-02-12T05:28:03","modified_gmt":"2026-02-12T10:28:03","slug":"5-ways-to-improve-project-profitability","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-us\/blog\/5-ways-to-improve-project-profitability\/","title":{"rendered":"5 ways to improve project profitability"},"content":{"rendered":"
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Do you know which projects are most profitable? For professional services firms, this is one of the most important questions you need to answer. If you don\u2019t, you aren\u2019t able to make accurate bids, optimize billable utilization, and make the right long-term investment decisions. This is true for all project-based services firms that deliver IT services and consulting to all aspects of business outsourcing. While they may all seem very different initially, they have one common theme: their survival and growth depend on project profitability<\/em>.<\/p>\n\n\n\n

That project can be a technology implementation, a brand campaign, a marketing event, a research project. Project-based work that has a beginning and an end with staff assigned to deliver the service. Contracts can be short-term or multiyear, and billing terms can vary from time and materials to fixed fees based on milestones. Since every project is slightly different based on the client\u2019s requirements, it\u2019s essential to understand project profitability not only by individual projects but also based on the project types, client types, geography, and industry.<\/p>\n\n\n\n

Improving project profitability in 2018 is more important ever for services companies as they face greater pressure on project margins, increased competition, and tighter labor market.  The responsibility doesn\u2019t fall on a single individual or a department in a firm. Impacting project profitability touches multiple functions and disciplines across the organization. But as the holder of the financial truth, the finance team has perhaps the greatest influence. They hold the financial data capable of identifying the projects to invest in and processes they can improve.<\/p>\n\n\n\n

In speaking with Sage Intacct customers in the professional services industry, I\u2019ve found that smart firms share five best practices for increasing project profitability:<\/p>\n\n\n\n

1. Track the right metrics \u2013 <\/strong>One of the most important steps to improving project profitability is to determine the metrics that matter most to your company\u2019s profitable growth.  Services Performance Insight recommends these five KPIs for services companies:<\/p>\n\n\n\n