Is Your Company’s Growth Profitable? How to Monitor and Ensure Sustainable Success
Jukka Markkanen, an expert at Severa, deepdives into why project-specific reporting should be a top priority for any company aiming to grow sustainably. In this post, he illustrates—with clear numerical examples—why professional services firms must closely track project profitability to ensure their growth is not just fast, but financially sound.
The Power of Numbers: Why They Matter
Numbers can be powerful—but only if you understand what they reveal. Every project, whether a short engagement or a multi-year endeavor, propels your business forward. The key is knowing whether you’re steering the ship in the right direction.
Why Being Busy Doesn’t Always Mean Being Successful
Over the years, I’ve seen many professional services companies outgrow their processes. One client shared how their accounting firm recommended Severa when their project tracking and overall management became too complex to handle manually. They used to sell projects at a fixed price, but poor time tracking left them blind to the real profitability of their work.
After implementing Severa, everything changed. Project profitability became transparent, and every billable hour was properly accounted for. In my view, this kind of transparency is the cornerstone of a modern services business. Without it, even the most aggressive sales efforts won’t necessarily lead to sustainable results.
The Numbers Don’t Lie: How Profitability Is Made or Lost
Time tracking may not be anyone’s favorite activity—but it’s essential to avoid projects quietly draining profits. The following real-life examples show how the number of hours worked can make or break a project:
Example 1: Profitable Project
- Invoiced Amount: €1,500
- Hours Worked: 30
- Hourly Cost (salary + overhead): €40
- Total Cost: 30 × €40 = €1,200
- Profit: €1,500 – €1,200 = €300
- Profit Margin: (300 / 1,500) × 100 = 20%
Example 2: Unprofitable Project
- Invoiced Amount: €1,500
- Hours Worked: 50
- Hourly Cost: €40
- Total Cost: 50 × €40 = €2,000
- Profit (Loss): €1,500 – €2,000 = –€500
- Profit Margin: (–500 / 1,500) × 100 = –33.33%
In the first case, the project was well-managed and delivered a healthy profit. In the second, uncontrolled time use turned a seemingly identical project into a financial loss.
Profitable Growth Starts with Openness and Shared Responsibility
Sustainable growth is built on a shared understanding of how work is done and why it matters. When project data and performance metrics are transparent, team spirit strengthens—because everyone can see how their individual efforts contribute to the bigger picture.
When the team understands the numbers, they take shared responsibility for the outcome—and actively work together to improve it. Smooth projects equals happy people, am I right?
Profitability Requires Strategy, Tools, and Real-Time Monitoring
Project-level profitability is a compass for your business. It tells you whether you’re on course—or drifting off track. But to act on what the numbers are telling you, you need three things: smart tools, relevant metrics, and a willingness to adapt.
Practical Steps to Improve Project Profitability
1. Establish Clear Reporting Practices
Use a centralized system to track key figures—like gross margins, billable hours, and forecasts—in real time.
2. Focus on High-Impact Metrics
Concentrate on the data that directly impacts profitability: billable rates, resource utilization, and project scope adherence.
3. Allocate Resources More Effectively
Treat time tracking as a strategic tool—not an administrative task. It reveals which projects perform well and where hidden inefficiencies lie.
4. Use Data to Drive Decisions
Leverage historical data to guide both day-to-day actions and long-term planning.
5. Commit to Continuous Improvement
Analyze both successful and failed projects to learn, evolve, and avoid repeating the same mistakes.
When you nail the basics, your company sets itself up to grow without the chaos—no disappearing visibility, no out-of-control mess.
Aligning Strategy and Technology: The Key to Smart Growth
The right systems do more than support operations—they push you to think bigger!
When strategy and execution align, the possibilities are enormous.
Tools like Severa not only give you real-time visibility into your current performance, but also help forecast future outcomes. With this clarity, you’re not just keeping pace with competitors—you’re setting the standard.
Make project reporting and performance tracking a core strength of your business. It might just be the game-changer that takes your growth—and profitability—to the next level.
Experience Severa in Practice
Curious how Severa could support your daily work? Try it yourself with a free 30-day trial. Explore the key features, see how projects, resources, and finances work together, and discover how Severa can help you manage your business more efficiently.
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Jukka Markkanen is a senior sales professional with years of experience working with the Severa PSA system. He specializes in helping expert organizations improve their operations and strengthen profitability.
