The five places profit hides

Hi Everyone,

There's money sitting in your P&L you're probably not seeing. It doesn't show up as one big line – it usually hides in five places, scattered across cloud bills, contracts, payment fees, and discounts.

Each one is small enough to ignore on its own, and together they often add up to 1 to 5% of revenue.

Today, we're walking through where to look and what to check for each one.

1. Cloud and infrastructure waste

Around 30 to 35% of what companies spend on cloud computing gets wasted. The money goes to computing power that nobody is using, expensive storage holding old files nobody opens, and test setups that were turned on once and never turned off.

To find yours, sit down with whoever runs your tech and ask them to pull the top 10 cloud bills.

For each one, ask three things:

• What's this for?
• Who's actually using it?
• Could we shut down half of it without anyone noticing?

2. Scope creep on fixed-price work

If you sell anything for a fixed price (a build, an implementation, a retainer, a service contract), you're probably delivering more than you quoted. Teams add bonus work to keep clients happy and rarely check what it costs the business.

To find yours:

• Take your last 10 fixed-price projects
• Compare planned hours to actual hours
• Count how many informal change requests went through without a formal change order

3. Payment processing fees

Stripe's advertised rate of 2.9% plus 30 cents becomes an effective 5.4% or more on international transactions once cross-border surcharges and currency conversion are added in.

Many companies don't track payment fees as a cost of sale at all, so the leak never shows up where someone would catch it.

To find your real rate, divide last quarter's total payment fees by total payment volume. It's almost always higher than the rate you think you're paying.

4. Discounts that never expire

Two common leaks live in your contracts. The first is temporary discounts that were supposed to come off at renewal but stayed on, sometimes for years.

The second is the annual price increases your contracts allow, but nobody applies, because no one owns the renewal pricing process.

To find yours:

• Pull every active discount older than 12 months and mark which ones were supposed to be temporary
• Check your last 20 renewals and count how many included the price increase your contract allowed

5. Unbilled work between systems

When the systems that track contracts, usage, and billing don't talk to each other, work gets delivered that never makes it onto an invoice. This shows up most often when customers pay based on how much they use, when consultants go over their monthly hours, or anywhere the team doing the work hands information to the team sending the invoice by hand.

To find yours:

• Pick 10 active customer accounts
• For each one, line up the original quote, the signed contract, what was actually delivered, and what was actually invoiced
• Any mismatch is unbilled revenue

Start here

We built a free Gross Margin Leak Finder. It runs the five checks from this issue for you. All you need is your annual revenue and a handful of inputs from each section.

By the end of it, you'll know which of the five leaks is the biggest one in your business and roughly what it's costing you each year.

Get your free Gross Margin Leak Finder

Go deeper

👉 The SaaS CFO: What Should Be Included in SaaS COGS – why most P&Ls misclassify costs, and the test for what actually belongs in cost of sale

👉 FinOps Foundation: State of FinOps 2026 Report – the latest data on cloud waste, where it concentrates, and what mature teams do about it

👉 Optimus Tech: Why Payment Processing Fees Are Growing 3x Faster Than Revenue – how fee creep happens and how to spot it on your own P&L

Coming up on Monday

On Monday, we'll talk about why the renewal decision is made months before the cancellation, and what to watch for earlier.

Have a great weekend!

P.S. We'd love to know which of the five leaks turns out to be the biggest one for your business. Let us know.