Earlier this month, Julie Ferraz, Controller at Next Level Now, and Sonja Pomerleau, VP of Sales, shared powerful strategies to help MSPs gain the financial clarity, control, and confidence they need to scale—without overcomplicating their operations.
The session explored high-impact financial mindset shifts and practical upgrades that give MSP leaders the tools to spot hidden profit leaks, forecast with precision, and make data-driven decisions for sustainable growth. A special thank you to Alternative Payments for hosting us and helping bring together such an engaged community of MSP leaders.
If you couldn’t make it live, here are the five biggest finance upgrades we covered that can help your MSP move from reactive to proactive growth.
1. The Profit Mindset Shift: Compete on Value, Not Price
Many $1M MSPs operate with a “price-driven” mindset: take any client who can pay, offer discounts, and bundle services without fully understanding profitability. This leads to razor-thin margins and unsustainable growth.
Next Level Now showed how high-growth MSPs flip the script. By analyzing client data, tracking margins by service line, and using a Target Customer Profile (TCP), MSPs can compete on value instead of price. That shift not only improves margins but also makes sales and marketing more strategic.
Quick Win: Review your top 10 clients by gross margin. Are they your most profitable—or just your loudest?
2. The Allocation Mindset Shift: Treat Labor as COGS, Not Overhead
When all tech labor is lumped into “overhead,” it’s impossible to see which services or clients are truly profitable. That’s how MSPs fall into the trap of underpricing projects or overstaffing without realizing it.
By mapping labor into COGS (Cost of Goods Sold) by service category—Managed Services, Projects, T&M—you unlock accurate gross margin reporting. This gives you a clear picture of where you make money, and where hidden profit leaks are draining growth.
Quick Win: Start pulling utilization and labor allocation reports from your PSA and tie them back to your income statement.
3. The Offering Mindset Shift: Standardize for Profitability
At the $1M stage, many MSPs fall into “bundled everything” mode: if it sells, we’ll figure out how to deliver it. That overextended portfolio leads to inconsistent delivery, hidden costs, and margin erosion.
High-performing MSPs narrow their focus, defining a portfolio of services that can be delivered efficiently, profitably, and at scale. Standardized packages not only protect margins but also improve client experience and staff productivity.
Quick Win: Audit your current offerings and cut low-margin, high-effort services.
4. The Cash Flow Mindset Shift: Forecast Beyond the Bank Balance
Too often, MSPs manage cash by checking the bank account balance. The problem? That’s how surprises happen—like coming up short right before payroll or missing out on growth opportunities.
Next Level Now emphasized the power of a 13-week rolling cash flow forecast. This tool gives leaders the ability to see problems before they happen, plan hiring and investments with confidence, and direct surplus cash toward growth.
High-performing MSPs also enforce AR best practices: short payment terms, signed agreements before work starts, and strict follow-up within 5 days of invoices going past due.
Quick Win: Build a rough 13-week forecast—even if it’s simple. The clarity it brings is game-changing.
5. The Forecasting Mindset Shift: Use KPIs as Your GPS
The final upgrade is about turning data into strategy. Instead of “trying to beat last year’s numbers,” MSPs need integrated forecasts that cover revenue, gross margin, SG&A, and net income over 1–3 years.
Next Level Now shared the key KPIs that matter most for MSP growth:
- Service Gross Margin %
- Billable Utilization %
- Revenue per Employee
- Monthly Recurring Churn %
- AR Days (DSO)
- Customer Lifetime Value
- EBITDA Margin %
With the right KPIs in place, leaders can spot trends, adjust proactively, and tie forecasting directly to business strategy.
Quick Win: Pick 7–8 KPIs and review them monthly with your leadership team.
The Roadmap to a Financially Mature MSP
Next Level Now wrapped up the session with a roadmap any MSP can start using today:
- Fix the leaks – adjust pricing, cut unprofitable offerings, enforce AR discipline.
- Get visibility – pull gross margin by service line, review client profitability.
- Strengthen forecasting – build monthly forecasts and benchmark against best-in-class.
- Align KPIs – focus on the 7–8 metrics that drive smart decisions.
The Bottom Line
Financial systems are more than just numbers—they’re business insurance. With the right mindset shifts and upgrades, MSPs can avoid surprises, make proactive decisions, and accelerate sustainable growth.
Ready to take the next step? Connect with Next Level Now and discover how our embedded finance leaders can help you gain the clarity, control, and confidence you need to grow.