Why FM businesses often don’t know which contracts are actually making money
Ask most FM finance directors how the business performed last month, and you’ll get a confident answer. Ask them which of their 40, 80 or 200 contracts were actually profitable, and the confidence often drops.
It’s not that the information doesn’t exist. It’s that it’s scattered, across spreadsheets, site managers’ notes, subcontractor invoices, and a finance system that was built to report on the business as a whole, not contract by contract.
That’s a problem, because FM is a contract business. Every site has its own labour mix, subcontractor spend, materials cost and SLA penalties. Margins can vary hugely between one contract and the next, even within the same client relationship. A business can be growing top-line revenue every year while quietly carrying two or three loss-making contracts that nobody’s had the time, or the data, to spot.
Why this stays hidden
Most finance systems report at company or cost-centre level. Getting to contract-level profitability usually means someone in finance building a manual workaround: pulling data from the general ledger, cross-referencing it against a separate contract tracker, and rebuilding the picture from scratch every month. It’s slow, it’s easy to get wrong, and by the time it’s done, the numbers are already a month old.
The result is that contract reviews and renewal negotiations often happen on instinct rather than evidence. A contract might get renewed because it “feels” like a good client relationship, when the numbers, if anyone had time to pull them, would tell a different story.
What good looks like
The businesses that manage this well don’t have better instincts. They have finance systems built to tag every transaction, revenue, subcontractor cost, labour, materials, against the contract and site it belongs to, automatically, as it happens. That means a contract-level P&L isn’t a special project someone runs once a quarter. It’s just there, in real time, whenever anyone needs it.
That’s the idea behind dimension-based reporting in a system like Sage Intacct: every transaction carries enough context, contract, site, service line, to be sliced however finance, or operations, needs it, without extra manual work.
A question worth asking
If someone asked you right now which three contracts had the worst margin last quarter, how long would it take to answer, and how confident would you be in the number? If the honest answer involves “let me get back to you” and a few hours in Excel, it might be worth looking at whether your finance system is actually built for the way an FM business runs, or just adapted to cope with it.
Sarah spends her days deep in the world of Sage Intacct and Sage 200, keeping across everything from new features to the practical stuff that actually matters to finance and ops teams. She writes to break down what’s new and what it means for the people using it day to day. No jargon, no fluff – just the useful bits.
