Avoiding common ConnectWise agreement profitability mistakes is crucial, as agreement profitability reporting is one of the key features ConnectWise Manage offers to keep your business on track. However, if you’re not careful, these reports can be misleading, and what appears profitable on paper may actually cost you big in reality. As PSA Consultants, we frequently come across these mistakes that can easily throw off your profitability reporting.
1. Addition Costs Are Missing or Inaccurate
First and foremost, including accurate addition costs in your agreements is essential. They should reflect your hard costs for delivering the service. For example, if you price agreements per workstation, make sure to include the cost of your RMM agent or any other tools tied to that workstation. Otherwise, you end up underestimating your costs and overestimating your margins.
Furthermore, you need to regularly review and update these addition costs. As your expenses for tools or software licenses change, your ConnectWise setup should change as well.
2. Subscription and License Products Are Bundled with Managed Services
Another common mistake we see is lumping resold products, like Office 365, into your primary labor agreements. This causes confusion and inaccuracies in your profitability reporting. Why? Because resold products generally don’t include the labor cost required to support them.
Instead, for accurate reporting, separate your subscription and license products into child agreements. Consequently, this approach keeps product sales distinct from your managed services labor, giving you a clearer picture of profit drivers and cost distribution.
3. Covered Work Roles and Work Types Are Misconfigured
Next, it’s essential to think carefully about which work roles and work types should be covered under your agreements. For example, roles like sales should typically not be included in a managed services agreement. After all, they don’t contribute to supporting the service but are focused on generating new revenue.
Therefore, mark sales work types as non-billable and not covered to ensure they don’t impact your agreement’s profitability calculations. Misconfiguring covered work roles and types will lower your reported margins, giving you an inaccurate view of profitability.
4. Member Hourly Cost Fields Are Missing or Outdated
Finally, the most critical issue—and the one that makes or breaks your profitability reporting—is failing to update the hourly cost field for your members. You must associate a cost with every hour logged against an agreement. And that cost should be your fully burdened member rate, not just base pay.
As a result, if you leave this field blank or let it become outdated, your cost calculations will be severely inaccurate. Your reports will then reflect inflated profit margins, leading to strategic missteps.
Need Help?
If you’re unsure about your agreement setup or need guidance avoiding ConnectWise agreement profitability mistakes, we’re here to help. Reach out to us at info@pivotalcrew.com. As PSA Consultants, we specialize in getting your ConnectWise configuration right so you can trust your data and make informed decisions.