Most owner-managed businesses know their sales by channel. Very few know their profit by channel, let alone by customer or by salesperson. Which channel really pays its way once delivery, refunds and advertising are counted? Which customers cost you money? Is each salesperson covering their own cost?
We built exactly that inside a multi-million-pound UK trading business. It pulls straight from the ERP and the accounts system, refreshes in one line when the month closes, and comes with a planner that prices every “what if?” in pounds. Here’s how it works, and what it changed.
Turnover lies: look at profit in four layers
A channel with the most sales can make the least money. You only see it when you peel profit back in layers:
1. GP1: sales less cost of goods. Are we pricing right?
2. GP2: less credits, refunds and delivery. Do we keep the margin once orders go out?
3. Contribution: less the costs a channel causes, like advertising for the website or the sales team for trade. Does the channel pay its way?
4. Net profit: less a fair share of overheads. After everything, is it worth it?
Prove it before anyone trusts it
A colleague had built the first version by hand for eight months. It answered the right questions, but had to be rebuilt every month. We wrote the method down first, then set one rule: the automated version had to reproduce those eight months line for line before anyone used a number. It did, to within about £1, and that match did more for trust than any presentation. Every refresh now runs 45 checks that must all come out at £0.00.
Plugged into the ERP, so nobody keys data
The ledger comes straight from the accounts system and the order data from the ERP, which already refreshed a reporting workbook every morning. A person signs in and approves the downloads. Nothing is typed in by hand. When the month closes, someone types one line: “refresh the profit by channel for October”.
The column that changes the conversation about customers
Share every cost out and some customers look loss-making. But fixed costs, like the sales team and the warehouse, don’t leave with a customer. So next to each customer we show the profit you’d actually lose each month if they left. Some customers at the bottom of the table are still paying towards the rent. The right question becomes “what would make them profitable?”: price, minimum order or delivery charges.
“For each customer in this P&L, split their costs into those that would disappear if they left and those that would stay. Add a column for profit lost per month if they left, and rank customers by it.”
The meeting where it paid for itself
We replaced six scenario spreadsheets with one planner that starts from actual results and prices every lever in pounds a month. The surprise: a 10% rise in sales was worth less than a one-point cut in credits, because advertising grew with web sales. Improving return on ad spend was worth more than either. The conversation moved from “sell more” to margin and efficiency, and the leadership team agreed a set of cost changes and a break-even plan with four measurable targets in a single meeting.
“Using the planner, work out what each of these is worth to net profit per month on its own: margin up 1 point, credits down 1 point, sales up 10% at the same mix, return on ad spend up 1, fixed costs down 10%, and losing each of our five biggest customers. Rank them.”
Use a business account for your AI assistant and check its data settings before sharing financial details. Agree your method with your accountant.
Build it yourself, or have us build it
Profit You Can See is our full playbook on how we built it: the method, every check, the problems we hit and 22 copy-ready prompts. It comes with the Cooper Vance Profit Planner, an Excel workbook with profit by channel, customer and salesperson, a scenario planner (lose a customer, raise margin, cut direct costs) and break-even and target sales, loaded with an example business so you can try it straight away.
Rather have it done for you? Our Profit by Channel Setup is £2,495 + VAT, fixed price, done in two weeks: we connect it to your ERP and accounts system so no data is keyed in, prove it against months you’ve already reported, set up the planner and a one-line refresh you run on demand, and train your team.
We’re not IT people. We’ve sat in the MD’s chair and built the systems behind it, and we’ll talk to you in plain business terms. If profit is a symptom of a bigger growing pain, take the free Growing Pains Check or look at our Growing Pains Diagnostic.
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