Field Notes
Essays from inside a 120-person digital agency on Jira — written by Ernest. Project margin, estimating, the architecture of profitability, and the small decisions that compound. No content marketing.
A six-person team idle for a fortnight costs about £17,000, and that cost appears on no report — the bench dissolves into overhead and quietly degrades the margin of every healthy project. How to price idle capacity, why discounted work can cost more than the bench it fills, and what the bench is actually telling you.
A £450/day contractor and a £340/day employee are not £110 apart — they are two different cost shapes, and agencies routinely misprice both. When the contractor is genuinely cheaper, when they quietly eat the margin, and why contractor cost so often never reaches the project report at all.
Most agencies discover a project was unprofitable at the monthly close — weeks after the costs landed, often after the team has moved on. It isn't a speed problem with your accountants; it's a cadence problem with the number itself. What lateness costs, and what changes when margin is continuous.
Most agencies that lose money on projects don't know it — the signals are operational, not financial, and they show up months before the accounts do. Seven signs to check against your own agency, and the data question that confirms or clears each one.
When a single client is 30–40% of agency revenue, it is both a margin risk and a valuation risk. How to measure client concentration risk on real margin, not just invoice value, what a healthy client mix looks like, and how to de-risk on purpose.
A team can run at 90% billable utilisation and still lose money. Utilisation measures busyness, not value — and it is the easiest agency number to game. The case for watching real margin per head and realised rate instead, with a worked example of two teams at identical utilisation and very different profit.
On most agency margin reports the design team reads as the loss-making line. The cause is rarely the team — it's unbounded revisions, undefined sign-off, unscoped discovery, and design hours bleeding into the build. How to fix design agency profitability without crushing craft.
15 minutes on your real Jira, our screen.
Book a demoA profitable agency can still run out of cash, because margin is an accrual idea and cash is a timing idea. Where the gap opens — WIP, milestone lag, deferred revenue, payroll, the VAT trap — and a worked example of a month that is profitable on the P&L and cash-negative in the bank.
Showing project margin numbers to project managers and engineers feels like a transparency win. In practice it produces a measurable productivity drop in the first quarter, a measurable trust erosion in the second, and a slow rebuild over the third. Manager view — the same metric, expressed in a unit the role can actually act on — is the version of transparency that pays back.
Most agencies pay their sales team a percentage of invoiced revenue. The structure rewards landing big estimates and ignores whether those estimates were profitable to deliver. The maths, the behaviour change it produces, and the bonus structure that fixes it without a 30%-pay-cut conversation.
Every agency has Development work, Support work, and Internal work — but most agencies report on them as one thing. Until they're separated, support quietly subsidises development, internal time disappears, and margin reads wrong on every line. The structural fix and the conversation each sub-project type needs.