The Agreement Profitability App offers in-depth insights into the financial performance of managed service agreements. It enables Managed Service Providers (MSPs) to track profitability trends, analyze cost breakdowns, and identify underperforming agreements. This app helps decision-makers and finance managers maximize revenue, reduce inefficiencies, and validate the ROIs of agreements.
By combining billing, labor, and product addition data, the app offers a comprehensive view of profit margins, effective rates, and contribution rates over time and across clients.
Key Features and Benefits
- Track Agreement Profitability Trends: Visualize monthly trends in Profit Margin, Effective Rate, and Contribution Rate to understand overall performance.
- Client-level Analysis: Use heatmaps to quickly spot underperforming accounts, filtering by company or agreement type.
- Detailed Profitability Views: Drill into profitability by client or agreement for in-depth insights.
- Break Down Costs and Revenue: Compare labor efficiency and product billing activity to assess agreement value.
Prerequisites
Before using the Agreement Profitability App, ensure you have the following:
- ConnectWise PSA integration with MSPbots. The Agreement Profitability App is pre-installed for all ConnectWise PSA users.
-
Financial role
How the App Works
The Agreement Profitability App provides a comprehensive view of your agreement performance through multiple dashboards.
Agreement Profitability Overview
The Agreement Profitability Overview provides a high-level summary of profitability trends across agreements, highlighting margins, costs, and labor efficiency over time. You can use it to:
- Track overall profitability and margin trends month-over-month
- Monitor labor efficiency and contribution rates over time
- Identify margin improvements or declines by agreement type
Key Widgets and Metrics:
- Agreement Profitability Summary (by Type): Table summarizing the agreement count, billed amount, profit, profit margin, labor hours, effective rate, and contribution rate by agreement type
- Agreement Profit Margin Trend
- Agreement Effective Rate Trend
- Agreement Contribution Rate Trend
- Agreement Labor Hours Trend
Agreement Profitability Heatmap
The Agreement Profitability Heatmap visualizes client profitability using a color-coded heatmap for quick assessment. You can use it to:
- Quickly spot clients with multiple low-margin agreements
- Use color cues to prioritize client reviews or cost optimizations
Key Widgets and Metrics:
- Profit Margin (by Company): Heatmap table showing the monthly profit margin per client
Agreement Profitability Details
The Agreement Profitability Details offers detailed profitability breakdowns by agreement, client, and agreement type. You can use it to:
- Drill into agreements affecting overall margins
- Identify costly agreements or those with high labor/product costs
- Compare labor hours against targets to spot inefficiencies
- Inform pricing, renegotiation, or operational decisions
Key Widgets and Metrics
- Agreement Profitability Details (by Client and Type): Detailed table showing billed amount, addition cost, labor cost, profit margin, effective rate, and contribution rate by client and agreement type
- Agreement Labor Hours vs Target Hours: Line graph comparing actual labor hours versus target hours
Agreement Addition Billing
The Agreement Addition Billing focuses on billing and costs related to product additions on agreements. You can use it to:
- Monitor trends in product billing volumes and revenue
- Identify growing or declining products
- Assess the profitability of product additions by client and agreement
- Support pricing, bundling, and usage validation strategies
Key Widgets and Metrics
- Agreement Addition Billing Summary - Per Company: A table summarizing the profit margin per client based on product quantities billed, and a drill-down for detailed analysis
- Billed Product Quantities: Monthly trend of billed quantities
- Total Billed Amount: Monthly trend for the total amount of billed products
Calculations and Data Sources
This table shows how key metrics in the app are calculated.
| Term | Calculation | Data Source |
| Agreement Value | Total Additions Price, calculated as sum of (Quantity x Unit Price) for each addition. Note: For agreements with an annual billing cycle, the agreement value is divided by 12 to get the monthly amount. |
Agreement Additions:
|
| Billed Amount | (Product Quantity x Unit Price) + Service Total from the invoices |
Invoice:
Products:
|
| Addition Costs | Sum of (Quantity × Unit Cost) for each addition. | Products:
|
| Labor Hours | Actual hours logged against an agreement | Time Entries:
|
| Labor Costs | Labor Hours x Member Hourly Cost |
Members:
Time Entries:
|
| Profit | Billed - (Addition Costs + Labor Costs) | Same sources as Billed, Addition Costs, and Labor Costs |
| Margin | Profit ÷ Billed | Same sources as Profit and Billed |
| Effective Rate | (Billed - Addition Costs) ÷ Labor Hours Note: If the number of labor hours is < 1, then it is rounded off to 1. |
Same sources as Billed, Addition Costs, and Labor Hours
|
| Contribution Rate | (Billed – Addition Costs – Labor Costs) ÷ Labor Hours Note: If the number of labor hours is < 1, then it is rounded off to 1. |
Same sources as Billed, Addition Costs, Labor Costs, and Labor Hours |
| Target Hours |
|
Same sources as Billed, Addition Costs, Labor Costs, and Labor Hours Agreement Profitability App Settings Page:
|
The image below shows the color code used to display the profit margin values across all dashboards.
Setup Instructions
After completing the prerequisites, go to the Apps section and open Agreement Profitability for ConnectWise PSA to get started.
The dashboards work out of the box, but you can customize how key metrics are calculated using the available options in the Agreement Profitability App Settings.
-
Target Hours
Target Cost Margin – Set your desired cost margin (in decimals). The Target Cost Margin represents the percentage of labor costs and additional costs relative to the total amount billed. It is used to calculate the target hours needed to achieve the desired profit margin. By default, the Target Cost Margin is set to 70%. -
Addition Cost
Include Non-Billed Additions - When enabled, Non-Billed Additions (i.e., the internal or bundled costs not invoiced to the client) will be included in cost calculations. -
Total Billed
Limit to Labor-only Additions - When enabled, the Total Billed will include only service totals (charges for labor or time-based work) from the invoices and billable additions with zero cost. -
Labor Hours
Include Time Entries without ticket attached - By default, only actual hours from time entries recorded against an agreement and linked to a ticket are included. When enabled, actual hours from time entries recorded against an agreement will be included, regardless of whether a ticket is attached.
Limit to Time Entries with Applied Hours - By default, all actual hours from time entries recorded against an agreement are included, even if the Applied Hours value is blank or zero. When enabled, only time entries with a non-zero Applied Hours value will be counted.
Each dashboard also includes slicers that let you:
- Include or exclude additions from cost calculations
- Choose a specific date range
- Filter by agreement type or company
Frequently Asked Questions (FAQs)
Does the Agreement Profitability App use data from my accounting software (Quickbooks, Xero)?
No, the app only pulls data from ConnectWise PSA and does not require integration with any accounting software.
Can I clone the dashboards and datasets to customize them?
Yes, but we do not recommend cloning dashboards and datasets for customization. The datasets powering the Agreement Profitability App are purpose-built with a complex logic. Customizing them without a deep understanding of the structure may lead to inaccurate results.
Instead, you can use the Settings page, which provides customization options for key calculations that help you align your agreements management better.
What is the reference data for Invoices?
The Agreement Profitability App uses a calculated run date based on the Run Year and Run Month values pulled from the API.
For example, if Run Year = 2025 and Run Month = 5, the Invoice Date used is May 1, 2025.
Which invoices are included in the calculations?
Only invoices where the invoice type is set to "Agreements" are included.
What should I do when I see inaccurate numbers?
Start by reviewing the Calculations and Data Sources section of this article to understand how the metrics are generated. Then:
- Check the app settings - Adjusting certain options can help align the calculations with your agreement setup.
- Drill into the data - Filtering by a specific client and invoice month validates the numbers at a more granular level.
Still unsure? Submit a support ticket with sample data, and our team will perform an in-depth investigation.