How-to

How to track costs and profit per client project or side project

Which costs to count, how to turn yearly and quarterly bills into a monthly figure, how to share costs between projects and how to see which ones actually pay.

Updated October 12, 20269 min read

Most freelancers and indie founders know roughly what their projects cost and have no idea which ones pay. The costs sit on three cards, two invoices and a spreadsheet nobody updates. Putting them on the project they belong to is the first step to answering a simple question: is this one worth keeping?

This guide covers what to count, how to make bills comparable, how to share costs between projects and how to review the result.

What costs should I count for each project?

Anything that exists because the project does.

Infrastructure: hosting, servers, databases, a CDN, storage and backups.
Domains and certificates: registration, renewal and any paid certificate.
Services: email delivery, monitoring, analytics, error tracking and search tools.
Tools and licenses: plugins, themes, templates, design assets and paid libraries.
Subscriptions only this project needs.

If you work with clients, also decide what is yours and what you pass on. A cost you bill to the client is not a cost to you.

How do I turn yearly and quarterly bills into a monthly figure?

Bills arrive on different schedules, which makes them hard to compare. Convert each to a monthly equivalent:

Billing	Monthly equivalent
Monthly	The amount
Quarterly	Amount divided by 3
Yearly	Amount divided by 12
One time	Counted in the month it was paid, not spread

A domain that costs 14.00 a year is about 1.17 a month. A hosting plan at 24.00 a month stays 24.00. A one-off template for 59.00 is a cost in the month you bought it.

Some costs serve more than one project: a tool you pay for once, a server that hosts three sites. Leaving them out flatters every project, so split them with a rule you can explain.

Evenly, when usage is similar.
By a share, such as 50, 30 and 20 percent, when one project clearly uses more.
Entirely to the one project that caused it, when a cost is only there for it.

Write the rule down once and keep it, so figures stay comparable from month to month.

How do I handle several currencies?

Do not add amounts in different currencies together. A total that mixes euros and dollars is wrong in a way that looks right. Keep one total per currency, and convert only when you need a single number, with a rate you record at the time.

How do I know if a project is profitable?

Margin is revenue minus cost over the same period.

Margin = revenue in the month - cost in the month

Two points matter:

No revenue is not zero profit. A project with no recorded revenue has no margin yet. Showing zero would suggest a result when it is only missing data.
Time counts too. A project that earns little and takes hours to keep running is more expensive than its bills show. Note the time next to the money.

An example

An illustrative set of numbers for one client site, in euros.

Item	Billing	Monthly equivalent
Hosting	24.00 monthly	24.00
Domain	14.00 yearly	1.17
Monitoring share	9.00 monthly, split three ways	3.00
Email service	18.00 quarterly	6.00
Total cost		34.17

If the client pays you 120.00 a month for the site, the margin is 85.83 before your time.

How often should I review costs?

Monthly: glance at the total and anything that jumped. A jump of a third or more over the recent average is worth a look.
Quarterly: review the whole list. Remove what is unused, check renewals coming up and rethink any project that costs more than it earns.
At renewal: every domain and plan renewal is a decision, not a habit.

Tax treatment of tools, VAT and deductions depends on your country and your situation, so ask your accountant instead of relying on a spreadsheet.

Where Datumboard fits

Datumboard lets you record costs and revenue per project, counts yearly and quarterly amounts as a monthly equivalent, keeps currencies separate and shows margin only once revenue exists. It can import a CSV, and costs are visible to owners and admins only. It is in early access, and you can join the list below.

Frequently asked questions

What costs should I count for a client website or side project?

Count everything that exists because of the project - hosting, domains, certificates, email and monitoring services, paid tools, plugins and licenses. Shared costs such as a tool you use for several projects should be split between them instead of left out.

How do I convert a yearly cost into a monthly one?

Divide the yearly amount by twelve and the quarterly amount by three. This gives a monthly equivalent you can compare across projects, even though you pay the bill once a year or once a quarter.

How do I add costs in different currencies?

Do not add amounts in different currencies together. Keep a separate total for each currency, and convert only when you need one figure, using a rate you note down.

How do I know if a side project is profitable?

Subtract the project's monthly costs from its monthly revenue. If there is no revenue yet, the margin is not a result, it is missing data, so record revenue before judging the project.