Harvest Project Profitability by Client

Profitability is billable amount less what the time cost. The answer depends entirely on cost rates being set, and a missing one makes the margin look better than it is.

Project profitability in Harvest is billable amount minus the cost of the time, by client, project and month. The answer is only as good as the cost rates behind it: a person without a cost rate in Harvest costs zero, and the margin looks better than it is. This post covers the method, the cost-rate check that matters most, and how to ask for the result by client.

What the margin is

Two amounts per row. Billable amount is billable hours times the billable rate: what you charge. Cost amount is hours times the cost rate: what the time costs you. Margin is billable amount minus cost on billable time. Margin percent is that margin divided by the billable amount.

Example (illustrative), one client-project, one month
Billable amount     12,000
Cost of the time     7,800
Margin               4,200
Margin percent       35%

The same calculation from a plain timesheet export is in project profitability from a timesheet export. What Harvest adds is that both rates live in the system, so the calculation does not need a rate table bolted on.

The cost-rate check

Before you trust any margin figure, check cost rates. In Harvest, cost rates are set per person. If someone logs billable time and has none, the cost of that time is zero. The project then looks highly profitable, and the effect is invisible unless you look for it. Open the people list, confirm every person who logs time has a cost rate, and note any contractor whose rate is a flat estimate.

A related point: the Quiriz dataset deliberately has no person column in the cost table. Cost and margin are by client, project and month, so nobody's pay rate can be reverse-engineered from it. That is by design, and it means you cannot rank people by margin from this data.

How to read the result

• Sort by margin dollars to see who funds the business. A client with 60 percent margin and small volume matters less than a client at 25 percent with large volume.
• Sort by margin percent to find the weak ones, then check why: a rate that was never raised, scope creep that logged more hours than priced, or a cheaper rate agreed for volume.
• Look at the trend by month. A project that started at 40 percent and is now at 15 percent has a story.
• Do not mix currencies. Amounts are in the client's currency. Total each currency on its own.

Also separate this from utilization. Utilization asks whether people's time is billable; profitability asks whether the billable time paid for itself. A team can be highly utilized on a poorly priced client, and see utilization, realization and effective rate for how the three relate.

Asking in Quiriz

The [Harvest] Project costs by month dataset has one row per client, project and month for the last 13 months with hours, billable amount, cost amount and margin. The metrics are Harvest cost amount and Harvest margin, alongside Harvest billable amount. The connector is in beta. You can ask:

• Which clients and projects were most profitable last quarter?
• What was Harvest margin by client by month?
• Which projects have the lowest margin this year?

Definitions are held once in Company Context, so margin means the same thing in every answer, and the answer shows its work. When a cost rate is missing, the dataset carries a notice saying the margin is overstated; if you connected with a role that hides rates, the notice says that instead. The connector is read-only, refreshes daily and is included in paid plans. See Quiriz for professional services and for agencies for how firms use it.

A worked example: two clients, same hours

Two clients each take 100 billable hours in a month (an illustrative example). Client A is billed at 150 an hour, so the billable amount is 15,000, and the time costs 9,000 at an average cost rate of 90. Margin is 6,000, or 40 percent. Client B is billed at 120, so 12,000, and the same team costs 9,000. Margin is 3,000, or 25 percent.

Same effort, half the margin dollars. In a utilization report the two look identical, since both are 100 billable hours. In a profitability report the difference is visible, and it prompts the real question: is Client B worth keeping at that rate, or is it time for a rate review at renewal? The data does not decide, but it makes the question impossible to miss.

Keeping rates honest over time

Margin is only as current as the rates behind it. When someone gets a raise, their cost rate should change from that date, and when you renegotiate with a client, the billable rate should too. If rates are edited retroactively, history shifts. Decide who owns the rates, record changes with dates, and look at the margin trend after each change to confirm it moved the way you expected.

Limits

• Role matters. Connected as a non-administrator, Harvest may hide billing or cost rates, so those amounts import as 0. Connect as an administrator.
• Thirteen months. Older months are not imported.
• Fixed-fee projects have hours but no billable amount in this data.
• Margin is on billable time. Non-billable time and expenses are outside this metric.
• Overheads are not allocated. This is delivery margin, not a fully loaded profit; for the books side see combining Harvest and QuickBooks exports.

Frequently asked questions