Project margin tracking for fixed-fee and retainer work
A baseline you never revisit is just a guess. MarginFence keeps the original numbers intact and derives your revised position from the decisions you actually made.
Setting a baseline that means something
A project baseline in MarginFence has five parts: the contract amount, the estimated hours to deliver it, your internal cost rate, your billable rate, and your target margin. Together these produce a baseline gross margin the moment you create the project. Because these numbers are entered once and locked as the baseline, they stay a fair comparison point no matter what happens later in the engagement.
What changes the revised numbers
Revised revenue, cost and margin only move when a logged request is resolved with a decision. Declining a request leaves the numbers untouched. Charging for a request (at the recommended quote or a custom amount) adds to revised revenue and, once approved, to Protected Revenue. Comping a request adds its cost to revised cost without adding revenue, which is exactly where margin erosion becomes visible. Trading a request swaps effort rather than adding it, and MarginFence records the trade for the audit trail even though it may not move the dollar figures.
A worked example
Say a branding project has a $10,000 contract amount, 80 estimated hours, a $35 internal cost rate and a 60% target margin, giving a baseline margin around 72%. Midway through, the client asks for two extra logo concepts, estimated at 6 hours. At a $35 internal cost rate that is $210 of internal cost. If you charge the recommended quote instead of comping it, revised revenue rises by that amount and your margin holds close to baseline. If you comp it instead, revised cost rises by $210 with no revenue offset, and the revised margin drops accordingly.
A record you can look back on
Every logged request, along with its decision, quote and approval status, stays attached to the project. Three months after a project closes, you can see exactly which requests were charged, which were comped, and what that did to the final margin, without reconstructing the story from old email threads.
Frequently asked questions
Does the baseline ever change once it's set?
No, by design. The baseline reflects what you originally planned. If the underlying contract genuinely changes (a renegotiated fee, for instance), that is a new baseline, kept distinct from in-flight scope decisions so the comparison stays meaningful.
What is the difference between revised revenue and Protected Revenue?
Revised revenue includes every charged request regardless of approval status. Protected Revenue is stricter: it only counts charged requests the client has actually approved through a change proposal.
Can we track margin for retainers as well as fixed-fee projects?
Yes. Retainers work the same way: set a baseline for the retainer period, log requests that fall outside the agreed monthly scope, and track how those decisions affect the period's margin.
How precise do our cost and billable rates need to be?
As precise as you can make them. The math is only as useful as the rates behind it, so most teams use their real blended internal cost rate and standard billable rate rather than rough guesses.
How MarginFence works
Set the financial baseline for a project, log each extra request, see what it costs and what it should be quoted at, then choose Comp, Decline, Trade, Charge Recommended or Charge Custom. Charged work becomes a plain-language proposal your client approves from a secure link.
Related
- Agency profitabilityTrack baseline and revised gross margin on every engagement, and see where profit is leaking.
- Fixed-fee projectsProtect the margin on fixed-fee work where every extra hour comes out of your profit.
- RetainersTrack what the monthly fee covers and price everything that falls outside it.
Protect the margin on every client project
Create your workspace and log the next out-of-scope request in under a minute.