Customer Profitability (demo) - no. 104

Twelve months, six accounts, every hidden cost counted - all figures in thousands

The ranking that matters

rush = unbilled expedite hours and overtime · discounts = negotiated give-backs · rework = redos not recovered · carrying = cost of waiting to be paid at your line rate

Customer	Revenue	Jobs	Book GM	Rush	Disc.	Rework	Carry	True margin	True %	Rev rank -> true
Hilltop Builders	212	31	64.2	18.9	7.4	4.1	2.6	31.2	15%	v 4
Fraser Homes	164	24	60.7	2.1	3.2	1.8	0.9	52.7	32%	^ 1
Westview Contracting	118	19	47.8	1.4	2.9	2.2	1.1	40.2	34%	^ 2
Chilliwack Custom	96	14	43.6	0.8	1.6	1.2	0.7	39.3	41%	^ 3
Delta Developments	71	11	21.9	6.2	3.8	2.1	1.4	8.4	12%	v 6
Mission Storefront	58	6	24.3	1.1	0.9	0.6	0.8	20.9	36%	^ 5

Hilltop Builders, the bridge from book to true

Gross margin on the books	64.2
less rush and expedite never billed	-18.9
less negotiated discounts	-7.4
less rework not recovered	-4.1
less 74-day average payment carrying cost	-2.6
True margin	31.2

What the machine recommends

> your largest customer ranks 4 of 6 on true margin
> a 6% price adjustment on Hilltop recovers $26.3k without losing the account
> Mission Storefront: less revenue than Delta, two and a half times the true margin. the next sales hour goes there.
> rush orders are the single largest leak: $30.5k across the book