Sales Up. Margin Down.
When revenue growth make businesses look healthier than they really are, FBPs can help change the story
Welcome back. This is episode 2 of The Quick Wins Series, and today I want to take you into one of the fastest places a new Finance Business Partner can create visible impact: margin leaks.
The Problem
Sales are going up. That should be a good thing. Except that it isn’t the case all the time.
Everyone is moving. Orders are coming in. The sales team is excited. The CEO feels some relief. The dashboard looks active enough to convince people that progress is happening.
Then finance looks closer and sees that discounts are creeping up. Delivery costs are rising. Returns are becoming more frequent. Some products are selling well but contributing very little. Some customers are ordering often but quietly draining profit. Some deals look impressive until you ask what had to be given away to close them.
This is where many businesses misread their own performance.
They celebrate revenue because revenue is loud. But in my experience, margin leaks rarely announces itself dramatically at first, because activity is going up. After some time, it’s clear that increased activity is using up more resources than the revenue it is generating. When that happens, there is a serious problem that needs fixing.
Helping the business fix this issue is a powerful place for the FBP to begin because margin leakage usually sits close to real decision-making. Pricing, sales, and fulfilment are some of the things that finance has limited influence on, yet Finance is the only function that can see the whole picture at once.
That entire picture is your advantage. Your job is to help the business see where growth is quietly becoming expensive. This is completely different from just reporting numbers; you can help fix stuff.
A Story
Some time ago, I was advising a finance professional who supported a fast-growing trading business.
His company had just recorded one of its strongest sales months. The sales team was proud. The CEO was pleased. People were already talking about expanding the product line because the market “clearly wanted more.”
But Tunde was uneasy, and I understood why.
The gross sales number looked strong, but cash still felt tight. Supplier pressure had not eased. The finance team was still juggling payments. And when he checked product-level margins, the story underneath the headline was very different.
One product category was driving a large share of the revenue growth, but the margin was near zero.
The sales team had been discounting heavily to win volume. Freight costs had increased. Small returns were being treated as normal. Nobody had joined the pieces because each issue lived in a different part of the business.
Sales saw volume. Operations saw fulfilment pressure. Finance saw the leak.
In the meeting, Tunde did not say, “Sales is destroying margin.” That would have ended the conversation before it had any chance to do useful work.
He showed three numbers.
Revenue growth. Gross margin drop. Net contribution after delivery and returns.
Then he asked one question that mattered. “Are we trying to grow overall sales, or are we trying to grow profitable sales?”
That question changed the discussion. The business did not stop selling. It simply stopped pretending that every sale was equally valuable.
The FBP helped steer the following conversations and actions that led to more margins being kept within the system.
Ajibola’s Tips
1. Check what revenue is hiding before celebrating it.
I have seen businesses grow sales and still become weaker because nobody paused to ask whether that growth was profitable. Revenue can flatter a team. Margin tells the truth with much less noise.
You should never look at sales growth on its own. Pair it with gross margin, contribution, discount levels, returns, and fulfilment cost. The aim is not to kill growth. The aim is to protect the value inside the growth.
Action Tip: This week, take your top five products, services, or customers by revenue and calculate their actual contribution after direct costs, discounts, and obvious service costs.
2. Separate good volume from expensive volume because not all growth deserves applause.
Early in my work with business teams, I noticed how easily large numbers could dominate the room. A big customer. A big order. A big month. But big does not always mean better, and activity does not always equal value.
As an FBP, part of your value is helping the business see which sales are strengthening it and which ones are only making people busy.
Action Tip: Create a simple table with three columns: Revenue, Margin, and Cash Impact. Use it to classify your top ten sales lines as Strong, Weak, or Dangerous.
3. Treat discounting as a business decision, not a sales habit.
I have watched discounts become normal simply because nobody wanted to slow down a deal. One salesperson discounts to close. Another does the same to compete internally. Before long, the business no longer has pricing discipline. It has bargaining.
You should help bring structure to discounting without making the business feel attacked. The real question is not whether discounts should ever happen. It is who approves them, when they are justified, and what margin floor the business is willing to protect.
Action Tip: Review the last twenty discounted deals and identify the lowest margin point the business accepted. Bring that number to your next commercial discussion.
4. Look for margin leaks that can be stopped without a major project.
Some margin problems need deeper operational work. But many early wins are much simpler than people assume: a discount rule, a minimum order size, a revised delivery charge, a product-mix conversation, a stop on loss-making promotions and/or products.
Your first win should be practical enough for the business to act on quickly and important enough for people to notice.
Action Tip: Find one margin leak that can be addressed with a rule change this month. Write the proposed rule in one sentence.
5. Frame margin protection as growth protection.
Finance professionals often lose the room because they sound like they are trying to slow things down. I learned early that protecting margin is not anti-sales. It is what allows sales to mean something.
When you speak to the business, do not make margin sound like an accounting preference. Make it clear that weak margins limit hiring, stock availability, supplier confidence, cash stability, and future growth. You could even link it to bonus payments – that would get everyone to listen.n
Action Tip: Prepare one sentence that links margin to something your business already cares about, such as cash, expansion, supplier trust, or sales commission quality. This gets everyone to think about protecting it instead of blindly growing the top-line that adds no real value to the business.
“Revenue tells you what entered the business. Margin tells you what stayed.” - Ajibola Jinadu
Grow With Us
If today’s issue resonated with you, then the next step is to build the habit of seeing what the business is missing before the damage becomes normal.
The Finance Business Partner Masterclass is where I teach finance professionals how to move from reporting performance to shaping the decisions that create it. [Join the Masterclass here]
No Nonsense Finance Business Partnering. If you want the practical book behind this series, get the eBook and start applying the ideas inside your own business. Get the eBook here.
Conclusion
A business can grow and still be getting weaker.
That is not just a finance theory. I have seen it happen when revenue gets the attention, and margin gets the leftovers.
As a FBP, margin leaks offer a strong first win because they sit close to real decisions: pricing, discounts, product mix, customer behaviour, delivery costs, promotions. These are not distant strategy topics. They are everyday choices that shape profit.
Do not walk into the business shouting about margin. Walk in with the numbers that show where value is escaping. Then help the team protect the sales that are worth protecting.
Tomorrow:. We will look at the second area where you can make a quick impact: cash.
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Cheers,
Ajibola