Client cost reporting for agencies

Purpose

To give service agencies a clear view of what each client actually costs the business by:

• Applying staff cost rates to calculate labor cost per client
• Allocating shared and dedicated tool costs across clients using configurable rules
• Producing a monthly cost-per-client and ROI report for internal finance review

The monthly cost-per-client report is what impacts pricing reviews, resourcing decisions, and contract renewals. It shows agencies whether a client is profitable once labor and tool costs are subtracted and helps avoid situations where you’re managing clients at a loss.

Data sources

1. Time tracking system: All time entries logged in the time tracking platform (e.g., Scoro, Toggl) for the reporting period. Reiterate fetches these automatically on a configured schedule.
2. Staff cost rates: A Reiterate-managed reference table storing the hourly costs per employee or role. Updated by the team directly within Reiterate.
3. Tool subscription costs: Monthly cost of each tool or software subscription used across client work. Sourced from the accounting system (e.g., Xero, QuickBooks) or uploaded manually.
4. Tool allocation rules: A Reiterate-managed reference table defining how each tool's cost is distributed across clients.
5. Client revenue: Monthly invoices or recognized revenue per client for the reporting period. Pulled from the accounting system or uploaded manually.

Key processing steps

1. Standardizing time entries, tool costs, and revenue per client

• Standardizes raw time entries before any cost calculation takes place. Employee and client names are aligned across entries and date formats are unified.
• Standardizes each tool's monthly subscription cost.
• Aligns revenue figures to the same client identifiers used in the time entry and tool cost data, so all three datasets join cleanly in the final summary.

2. Calculating labor cost per client

• Groups standardized time entries by client. Sums logged hours and entry costs to produce total hours and total labor cost per client for the period.
• Flags time entries where no matching staff cost rate exists for the employee or role so you can add a rate to the reference table before the next run.

3. Tool cost allocation

• Distributes each tool’s costs across clients according to how it is used:
  • Dedicated: 100% of the cost is assigned to a single designated client
  • Equal split: The cost is divided equally by the number of active clients in the period
• Flags tool subscription costs with no configured allocation rule so you can add an allocation method before the next run.

4. Summarizing the costs and unallocated costs

• Joins labor costs and allocated tool costs per client to produce the final cost summary.
• Consolidates the unallocated costs identified earlier.

5. Calculating margin per client

Client revenue is joined to the cost summary by client. Calculates gross margin and margin percentage for each client. Clients where total cost exceeds revenue are flagged for review.

Outputs

1. Client cost report: A monthly breakdown per client showing total hours logged, labor cost, tool costs, revenue, and gross margin. Clients where cost exceeds revenue are flagged for review. Saved to the Reiterate File Library or exported to your BI or reporting tool after every run.
2. List of unallocated costs: Lists all unallocated time entries and tool costs from the run, with the information needed for the team to configure the missing rate or rule before the next reporting period.