In short

Accounting for agencies focuses on net revenue and people: net revenue per client after pass-through costs, gross margin after delivery labor and freelancers, utilization of billable staff, effective hourly rate on retainers and project overruns. It also covers cash forecasting around client payment terms and media float, pricing reviews and budgeting for hires.

Net revenue as the headline number

Agency performance is best measured on net revenue, after pass-through costs. Payroll, freelancers and overhead are then compared with net revenue, which gives ratios you can track month to month.

Client and project margin

Combining fees, freelancer costs and team time by client shows which accounts are profitable. A retainer client who consistently uses more hours than the fee covers becomes visible, and the conversation at renewal can be based on data.

Utilization and effective rate

If your team tracks time, we combine logged hours with payroll to report utilization and effective hourly rate by client. That is the clearest signal of whether pricing works.

Cash and media float

Paying media vendors before clients pay you can strain cash quickly. A forecast that shows media commitments, client terms and payroll highlights when to ask for prepayment.

Hiring decisions

We model the cost of a new hire against the net revenue they would need to support, using your actual margins.

Reporting we prepare

Agency owners need to see profit by client, not just by month. Our reports separate pass-through media spend from agency fee revenue, show effective hourly rate per retainer, and highlight scope creep where hours exceed the retainer. We track utilization by team member against payroll and contractor cost, and report work in progress for projects billed at milestones, so revenue recognition follows the work actually delivered.

We also review pricing when a client's scope changes.

Marketing & Creative Agencies problems this addresses

  • Client ad spend passes through the books and inflates revenue
  • Retainers are billed in advance for work done over the month
  • Freelancers and contractors are a large and variable cost
  • Project overruns are hard to see without time and cost tracking
  • Software subscriptions multiply quickly across clients and staff