What’s Eating Up Your Profits? The Hidden Cost in Your Contracts
You’ve got solid revenue, a great product or service, and your team is working hard. So why does it still feel like you’re barely scraping by?
We had a client come to us with exactly this problem. On paper, things looked okay — they were running at a 5% profit. But they were frustrated. Growth had stalled. Their team was stretched thin. They knew they needed help but couldn’t afford to hire the operations manager they desperately needed to scale.
Sound familiar?
This is where our fractional CFO services come in. Within a single 30-minute session, we uncovered two contract changes that could skyrocket their profit margins — not in theory, but in practice. Here’s how we did it.
Two Simple Fixes That Changed Everything
1. Add a Price Adjustment Clause
The first breakthrough came when we reviewed their contracts. They were locked into flat pricing — even though their costs were rising. Inflation, vendor increases, and supply issues were eating into their margins, and there was no mechanism to recover those costs.
By adding a simple annual price increase clause tied to inflation or supplier costs, they could protect their margins without upsetting customers. In fact, many clients expect this now — and when it’s clearly stated upfront, there’s rarely pushback.
2. Move to 28-Day Billing Cycles
This client was billing monthly — and waiting 30+ days to get paid. We advised switching to 28-day billing cycles. That small shift creates 13 billing cycles per year instead of 12. It accelerates cash flow, which is critical when you’re running lean.
Combined, these two changes lifted their profit margin from 5% to 28%. That difference gave them the margin they needed to hire the ops manager they’d been putting off — the exact hire needed to remove bottlenecks and scale the business.
Why Profit Margin Matters More Than Revenue
Most business owners obsess over revenue — but revenue is just vanity. Profit is the lifeblood of growth.
According to best practices outlined in Simple Numbers, anything below 10% profit is survival mode. At 5%, you’re treading water. You can’t reinvest. You can’t grow. You’re stuck.
But when you hit 15% or higher, you’re operating a healthy business. You have the margin to:
- Hire the right people
- Invest in better systems
- Make smart bets on growth
- Sleep better at night
This client went from “we can’t afford to grow” to “we’re hiring and scaling” — all from a 30-minute advisory session.
What Most Business Owners Miss
There’s a myth that growing businesses just need to “sell more.” But selling more of an unprofitable service or product only digs a deeper hole. That’s why our fractional CFO services focus on financial clarity first — because it lets you make strategic, profitable decisions.
Often, the biggest wins don’t come from massive overhauls. They come from:
- Better pricing
- Smarter cash flow
- Structuring contracts to protect your margins
These are the invisible levers that high-performing companies pull — and they’re available to you too.
Profitability Is a Strategic Choice
If your business is hovering at break-even, you don’t need to work harder. You need to make better financial decisions. That starts with visibility into the numbers that actually matter — and support from someone who can translate those numbers into action.
At Argento CPA, our fractional CFO services help you do exactly that. We don’t just hand you reports — we help you understand what levers to pull and when. Because with the right tweaks, you can unlock hidden profit, just like this client did.
Ready to See What You’re Leaving on the Table?
One quick session changed the trajectory of this business. Imagine what we can do in an hour.
Let’s talk. Book a discovery call today.