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Professional Services

Know which engagements truly pay.

In professional services your cost is people’s time — and standard charge-out rates hide where it really goes. ABC / TDABC reveals true margin by client, engagement and service line.

INDUSTRY · PROFESSIONAL SERVICESCOST & PROFITABILITY

BILLED VS COSTBILLEDCOSTEngagement A+19%Engagement B+4%Engagement C−16%

The problem

The charge-out-rate illusion.

Blended charge-out rates assume every hour costs the same to deliver. But scope creep, rework, admin, write-offs and unbilled time vary hugely between clients. Your highest-revenue clients are often your lowest-margin ones.

Why it matters

Pricing and resourcing in the dark.

Without true cost by engagement, you price on benchmarks, resource on gut feel, and write off overruns quietly. The firm grows revenue while margin erodes — and no one can say which clients are responsible.

Cost visibility maturity

How well do you cost an engagement?

Level 1

01

Reactive

Margin judged on billed revenue versus a blended cost rate. No engagement-level view.

Level 2

02

Structured

Time recorded per project. Some visibility, but write-offs and admin stay blended.

Level 3

03

Analytical

Activity-based costing of delivery, admin and rework. Reasonable margin by engagement.

Level 4

04

Optimised

TDABC by client, engagement and service line — live for pricing and resourcing.

How we engage

Three steps to true engagement margin.

01

Profit Check

A free diagnostic to estimate how much write-offs, scope creep and unbilled time are hiding in your current margins.

02

ProfitAudit 360

A 5–25 day engagement delivering true margin by client, engagement and service line, plus a pricing and resourcing roadmap.

03

Ongoing advisory

We embed the model in your engagement and resourcing cycle, so scoping, pricing and staffing reflect real cost.

Comparing approaches

Charge-out rate, ABC, or TDABC?

Approach	Engagement Accuracy	Write-off & Admin	Updates at Scale
Blended Charge-OutAverage rate per hour	✕	✕	✕
ABCActivity-Based Costing	✓	~	~
TDABCTime-Driven Activity-Based Costing	✓	✓	✓

✓Strong~Partial✕Weak

FAQ

Frequently asked questions.

Does this work for law, consulting and agencies?

Yes. Any firm that sells expert time — legal, consulting, engineering, agency, accounting — benefits from true cost by engagement.

Do you include write-offs and unbilled time?

Yes — they are usually the biggest hidden drains. We trace write-offs, scope creep and admin to the engagements that cause them.

Will it integrate with our time and billing system?

Yes. We build on your existing time, billing and cost data — no new systems required.

How does it change pricing?

By revealing true cost and realisation by engagement type, so you scope, price and staff to protect margin — not just utilisation.