Pricing and margin analysis
Updated
Most owner-managed businesses know their overall margin and cannot tell you which jobs, products or customers produce it. That is the difference between a number and a decision.
This is part of the fractional cfo half of a fractional CFO or fractional controller engagement.
Quick answer: Pricing and margin analysis breaks the business down to the level decisions are actually made at — by job, product line, customer or crew — and shows where money is made and lost. It then tests what a price change, a cost change or dropping a line would do, before you do it.
On this page
What pricing and margin analysis produces
- Margin by the unit you actually sell: job, product, contract, customer or location.
- The cost to serve, including the overhead most businesses never allocate.
- A break-even view, so you know what volume a price change has to hold.
- Price sensitivity tested before it is applied, not discovered afterwards.
- The leak between quote and invoice, which in project work is usually where the margin went.
- A recommendation you can act on, with the reasoning stated so you can disagree with it.
Why the overall margin hides the answer
A 30% overall gross margin usually hides 45% on some work and 12% on other work, and the 12% is often the easiest to win — which is why there is so much of it.
The number that matters is margin after the cost to serve, and that means allocating the overhead nobody allocates: the time spent quoting, the rework, the customer who takes four calls per order. Businesses that skip that step end up growing the wrong line.
What it depends on
This CFO-half work runs on the controller half beneath it: margin by job needs job costing, and margin by customer needs revenue coded that way. Without that coding, start with a close and chart of accounts fix rather than estimating around it.
Who this is for, and who it is not
A good fit: a business with more than one line, crew, product or location, where the overall margin is known and the mix behind it is not.
Not a fit: a single-service business with one price and one cost, where the arithmetic fits on the back of an envelope and does not need a CPA. We say so on the first call rather than quoting for work you do not need.
Common questions about margin work
How far back do you look?+
We do not have job costing. Can you still do it?+
Is this a one-off or ongoing?+
Will you tell us to raise prices?+
Starting fees
Every fee is fixed in writing before any work begins.
- Controller or CFO supportcontroller from $1,650, CFO from $2,750 a monthThis page
- Monthly bookkeeping, GST/PST filing includedfrom $325 a month
- Payroll, remittances, T4s and ROEsincluded in monthly bookkeeping
- Books, payroll and the year-end T2 together$500–$700 a month
- Corporate year-end and T2 returnfixed fee, quoted in writing
- Personal tax return (T1)from $125; self-employed or rental $275–$500
- Catch-up bookkeepingfrom $2,200 per year of records
- One-off advice call with a CPA$225 plus GST