Project Profitability Health Check

The industry benchmark across 500+ project businesses puts the average project margin at 37.7% in 2025, with the best-run firms above 50%. If yours is under 35%, the usual causes are unbilled hours and overruns on fixed-price work rather than your rates.

Growth adds non-billable time faster than billable time: more coordination, more sales, more onboarding. Low utilization usually means the extra hours are real but never registered against a client or a project, so they cannot be invoiced or managed. Registering every hour the day it happens is the first fix.

Give every project an hour budget before it starts, register hours against it daily, and compare hours used with work completed every week. The health check scores exactly this habit, and project budgets in TimeLog show planned against actual hours per phase while the project runs.

Rank clients by margin once a year, with every hour on the account counted, including meetings and account management. The client near the bottom is the one to reprice first. TimeLog gives that view per client from the registered hours.

Take what you invoiced for the project and subtract the cost of every hour spent on it, at each person’s cost rate, plus expenses. What is left is the project margin; divide it by the invoiced amount to get the margin rate. The math is simple; the hard part is having all the hours, which is why they need to be registered against the project as the work happens.