IT services · 🇬🇧 United Kingdom
Managed contracts billed annually, costs incurred monthly
An IT support business billing support contracts up front had no visibility of contract-level profitability.
UK IT support company, managed service contracts. Client identity withheld — we publish names only with written permission, so this engagement is described by its shape rather than by who it was.
Per-contract
Profitability introduced
4
Contracts repriced
Deferred
Revenue recognised correctly
The situation
- Support contracts were billed twelve months in advance and recognised on invoice.
- Engineer time was not tracked against contracts, so nobody knew which clients consumed the most support.
What we found
- Annual billing recognised up front made Q1 look strong and the rest of the year look weak.
- Two contracts consumed more engineer hours than they generated in revenue.
- Out-of-scope work was routinely absorbed rather than billed.
What we did
- Introduced deferred revenue over the contract term.
- Tracked engineer time against contracts to get real cost per client.
- Defined scope boundaries and started billing out-of-scope work.
The outcome
- Four contracts were repriced at renewal on evidence rather than instinct, and two clients moved to a higher tier.
- Monthly profit became a real number instead of an artefact of billing timing.
Start with a conversation
Recognise any of this in your own books?
Thirty minutes. We review where your books stand and where the money's actually going — no obligation.