Bookkeeping for marketing agencies, where revenue and profit rarely look alike.
Agencies book impressive revenue and wonder why the bank account disagrees. The usual culprit is pass-through spend — media buys, contractors, licences — flowing through the P&L as if it were yours, plus retainers recognised the month they land rather than the month the work happens.
The four problems we see most in digital & marketing agencies
Pass-through spend inflating revenue
Client ad budgets booked as agency revenue makes margins look terrible and confuses every lender who reads it.
Retainers recognised at the wrong time
Deferred revenue handled loosely, so profitable months and lean months trade places on paper.
No true margin per client
Contractor and staff time isn't allocated, so nobody knows which accounts actually pay.
Feast-and-famine cash
Project-based billing with 60-day payers, and no forecast showing when the gap arrives.
What we do about it
- Separate pass-through costs from real agency revenue
- Recognise retainers and deferred revenue correctly
- Build per-client and per-project margin reporting
- Tighten invoicing and collections to shorten the cash cycle
- Forecast cash around project timing, not calendar months
What this means when you go for financing
Agencies borrow for working capital — to make payroll while waiting on 60-day invoices, or to hire ahead of a big account. Lenders will want to see genuine margin and a receivables story, both of which require the pass-through problem solved first.
The services behind the work
Most engagements start with a cleanup, then move into ongoing accounting and a loan-ready package.