Their accountant said the accounts looked fine. I wasn't sure.

That's where this one starts.

A commercial HVAC contractor. Twelve years in business. A strong, loyal client base and £1.4 million in turnover. Net profit last year: £128,000. Around 9p in every pound.

The accountant had reviewed the year-end accounts and reported back: everything looks fine.

But 9% isn't fine. It isn't a disaster, but it's not fine either. Consider that a regular saver account can return five or six percent right now. This business was carrying all the risk, responsibility and complexity of managing engineers, contracts and client relationships — for a return that wasn't much above what sitting in a bank would give them.

So we looked properly. Four sessions. Every number on the table.

Here's what we found.

Session one: the bank statements

We started where we always start — three months of actual bank transactions, line by line. Not the summarised P&L. The real payments going out of the account every month.

The first thing we flagged was the premises. A unit at a business park, £4,200 a month — just over £50,000 a year. The unit was sized for fifteen engineers. They had six. More than half the floor space sat empty every single day.

The landlord had struggled to fill it for years before this business moved in. There was genuine room to renegotiate or downsize. Conservative estimate on the saving: £20,000 a year.

The next line was a software subscription — a field service management tool called Simpro, £280 a month. Except the business had moved to Jobber over a year earlier. Both tools do the same job. Last login to Simpro: November 2023. They'd been paying for it ever since, quietly, because nobody had looked.

Then there was a QuickBooks subscription running alongside Xero. They'd migrated to Xero. The previous accountant had apparently advised them to keep QuickBooks running. When we examined what they actually needed, there was no reason for it. Another £120 a month, going nowhere.

And then — and this one stays with you — Deliverect. A restaurant ordering platform. Running as an active direct debit on a commercial HVAC firm's bank account. They'd cancelled after a free trial. The direct debit kept going. £600 a year, invisible, because no one was looking at the statements with any intention.

The most significant finding in session one came from the tools and equipment line on the P&L. £24,800 in twelve months. When we traced back through the transactions, we found the same drill appearing four times. Not four different drills — the same model, purchased repeatedly. There was no stock tracking, no job sheet requirement for tools used on site, no system to flag what had already been bought. Engineers ordered what they needed. Nobody checked whether it was already there.

That's not negligence. It's the absence of a process. When you're running a busy operation, nobody's auditing what's been purchased twice.

Total identified in session one: £49,300.

That's almost 40% of the profit the business made last year. And we hadn't touched pricing yet.

Session two: margins and pricing

The business was running at 48% gross margin. The sector norm for commercial HVAC sits at 54–55%. That six-point gap, on £1.4 million of turnover, represented approximately £85,000 in additional gross profit if closed — through a combination of pricing discipline and buying power.

But the more immediate finding was the discounting.

One director handled all the quoting. His habit — built up over years of winning work — was to discount almost every job. Around 10% on average. He believed, genuinely, that the discounts were the reason clients chose them.

When we looked at the actual data from the previous twelve months, the win rate was 81%. Four in every five jobs quoted, won. Some with discounts. Some without. Some lost with discounts. Some lost without.

No pattern.

He was giving money away on work he would almost certainly have won at full price.

We suggested a simple starting point: cap discounts at 5% and observe. If jobs start to be lost that would have been won at 10%, you can adjust. The decision is reversible. But the data gave no reason to expect that.

On the previous year's project revenue of £532,000, reducing that discounting habit from 10% to 5% was worth £26,600 in recovered profit.

There were also fourteen active maintenance contracts with a combined annual value of £880,000. The oldest client had been on the same price since 2019. Most had seen no inflationary increase in years.

A 3% increase, phased over six months, across those contracts: £26,400 per year.

By the end of session two, the running total was £116,500.

Sessions three and four

Session three looked at churn and retention. Three contracts had lapsed the previous year — combined value of £87,000. One of them, worth £28,400 annually, had left over a single slow response to a breakdown call. The relationship had been strong. Nobody had followed up. No exit conversation had happened.

A direct call, an honest conversation, an offer of a goodwill gesture — there was a reasonable chance of winning that client back. Conservative profit impact: £2,556.

Session four looked at average order value. Eight of the fourteen active maintenance contracts were HVAC-only. Several clients had informally raised the idea of a compliance add-on — gas safety, water hygiene — and nobody had followed up to sell it formally. Five clients had asked. Nobody had built the product or had the conversation.

Conservative impact from three converted upsells and two reactive cover packages: £749.

The total

Across all four sessions: £119,805.

The business had made £128,500 in net profit the previous year.

In four sessions — without a single new client, without changing the team, without a new product or a new contract — we had found almost a second year's worth of profit sitting inside the business they already had.

What the directors said

At the end of the process, both directors reflected on it. Twelve years in business. Good at what they do. They said they'd always assumed the way to grow was through hard work. More engineers. More contracts. More effort.

This was different. This was looking at what was already there.

Clever work, not hard work.

If this sounds familiar

Most businesses that come through this process aren't in trouble. They're doing well. They just haven't had anyone sit with them, go through the numbers properly, and ask the questions that don't get asked at year-end.

If you'd like to find out where the leaks are in your business, the Profit Gap Tool at tool.mbsaccountants.co.uk takes about four minutes and looks across the same four areas — costs, pricing, retention and average order value.

If what you find prompts a conversation, you can book a free Profit Discovery Call with Jason, my head of growth, and we'll take it from there.

The numbers always reveal the leak. Sometimes you just need someone to help you look.