Profitability Reporting for Landscape Businesses

If you don’t know which jobs are making money and which ones are bleeding cash, you’re working blind. In landscaping, margins are tight. Labor costs are high. Weather throws a wrench into your schedule. And customers always want more for less.

That’s where Profitability Reporting comes in. With real-time job costing and automated financial reports, you can:

• See if you’re staying on budget at each job site

• Find out what’s dragging down profits—like idle time or scope creep

• Make smarter bids and fix underperforming jobs faster

It’s the process of tracking revenue, costs, and margins so you know where you’re making money—and where you’re not.

That includes:

• Labor and Travel Time: Automatically tracked with CrewID

• Equipment Usage: Logged through Toolie Bluetooth Tags

• Fuel, Mileage, and Maintenance: Captured by the Eagle One GPS Tracker

Momentum ties all of this together and shows you cost-per-job, cost-per-visit, and which jobs are profitable—in real time.

Many landscapers still use averages and gut feel to bid jobs and hope that it all works out by the end of the year. That’s a problem.

You need job-level visibility—down to the dollar. Momentum gives it to you. No spreadsheets. No manual input. Just clean, automatic data from your vehicles, crews, and tools.

Want the full breakdown? Head over to our Automated Job Costing & Profitability page.

If you’re into details, read on, if not skip down to the next section.

Here’s a breakdown of what profitability reporting typically involves:

Revenue Analysis 

Profitability reporting begins with an analysis of the company’s revenue streams. This includes examining sales figures, revenue trends over time, and the sources of revenue (like products/services sold or geographical regions).

Cost Analysis 

Businesses need to understand their costs thoroughly to assess profitability accurately. Cost analysis involves identifying and categorizing all expenses incurred in running the business, including direct costs (fleet, subs, materials and labor) and indirect costs (like overhead expenses and administrative costs).

Profitability Metrics 

Various financial metrics are used to evaluate profitability. Common metrics include gross profit margin, operating profit margin, net profit margin, return on investment (ROI), and return on assets (ROA). Understanding your return on assets like vehicles and heavy equipment has always been a major challenge for landscapers. Momentum solves this by automating the depreciation and cost-per-mile of ownership calculations. These metrics help assess how effectively the company is managing its costs relative to its revenue.

• Gross Profit Margin – Gross profit margin is a financial metric that measures the percentage of revenue that exceeds the cost of goods sold (COGS). It represents the portion of revenue that a company retains after deducting the direct costs associated with producing the goods or services sold.
  Formula: Gross Profit Margin = (Revenue – Cost of Goods Sold) / Revenue * 100%
  Gross profit margin indicates the efficiency of a company’s production process and its ability to generate profit from its core business activities.

• Operating Profit Margin – Operating profit margin is a financial ratio that measures the percentage of revenue that remains after deducting operating expenses, such as wages, rent, utilities, and depreciation, from gross profit. It represents the profitability of a company’s core operations.
  Formula: Operating Profit Margin = Operating Income / Revenue * 100%
  Operating profit margin provides insight into a company’s ability to generate profit from its primary business activities, excluding non-operating expenses and income.

• Net Profit Margin – Net profit margin is a financial metric that measures the percentage of revenue that remains as net income after deducting all expenses, including operating expenses, interest, taxes, and other non-operating costs. It reflects the overall profitability of a company.
  Formula: Net Profit Margin = Net Income / Revenue * 100%
  Net profit margin is a key indicator of a company’s overall financial health and efficiency in managing expenses to generate profit for shareholders.

• Return on Investment (ROI) -Return on Investment (ROI) is a financial ratio that measures the profitability of an investment relative to its cost. It evaluates the return generated from an investment compared to the initial investment amount.
  Formula: ROI = (Net Profit / Cost of Investment) * 100%
  ROI is used to assess the efficiency and profitability of investments, helping investors and businesses make informed decisions about allocating resources and evaluating the success of investment projects.

• Return on Assets (ROA) – Return on Assets (ROA) is a financial ratio that measures a company’s ability to generate profit from its assets. It evaluates how efficiently a company utilizes its assets to generate earnings.
  Formula: ROA = Net Income / Total Assets
  ROA indicates the effectiveness of asset utilization in generating profits. It is used by investors and analysts to assess a company’s profitability relative to its asset base and to compare performance across companies and industries.

Momentum automatically collects all of the data you need with GPS devices AND makes all of these financial calculations automatically. So much easier!

Comparison and Benchmarking 

Profitability reporting often involves comparing the company’s performance against industry benchmarks or competitors. This comparison provides context for understanding whether the company’s profitability is in line with expectations or if there are areas where it could improve.

A common benchmark for profitability in the landscape industry is 10 – 15% net profit for commercial jobs. 

There’s a large number of landscapers who buy into the “50% rule” as popularized by Keith Kalfas. The 50% rule is a solid rule of thumb. This post isn’t about debating his theories. It works for him and many others. But all of his pricing principles are still based on assumptions and averages.

Keith mentions “going over all the math” on overhead like time, labor, materials and administrative costs in this video.

This is typically where profits are lost because everything is based on assumptions. That’s a dangerous game to play for a lot of landscape companies, especially since all of the costs Keith listed (and more) are actually variable costs that should be associated with individual jobs and customers, not at a company level.

It’s worth noting that this type of “on the spot” math and quoting might work for small and medium operations, but not for large, sophisticated landscape organizations that operate in multiple geographic areas.

Trend Analysis

Examining profitability trends over time is essential for identifying patterns and assessing the effectiveness of business strategies. By analyzing trends, businesses can understand whether profitability is improving, declining, or remaining stable and can make informed decisions about future actions.

Root Cause Analysis
Profitability reporting may involve conducting a root cause analysis to identify the factors influencing profitability. This could include examining changes in pricing strategies, fluctuations in demand, shifts in market conditions, or inefficiencies in operations.

Decision Making 

The insights gained from profitability reporting are crucial for decision-making processes within the organization. Businesses can use this information to make strategic decisions about resource allocation, pricing strategies, cost-cutting initiatives, investments, and other aspects of operations.

Momentum automates all of the data collection and financial reporting for landscape businesses.