Accounting Services for Marketing and Creative Agencies
Profit by client and project, work in progress, pass-through media kept apart from fees, and a monthly close.
Agency accounting services
Agency accounting services keep the books the way an agency is actually run: profit by client and by project, work in progress that shows what has been done but not yet billed, pass-through media and production costs kept apart from the fees you earn, retainers recorded as they are earned, and 1099 contractors paid, tracked and reported correctly. Atidiv does this for US marketing, creative, digital and media agencies in QuickBooks, Xero or NetSuite. It starts with a review of your books, and pricing is custom, set once we know what the books need.
Why agency books hide where the profit is
An agency can grow its billings and shrink its profit at the same time. Media spend inflates the top line, a retainer client quietly takes twice the hours it pays for, and a freelancer's invoice lands two months after the job was billed. Standard small-business books show none of that. They show a revenue number and a bank balance. The questions an agency owner needs answered are which clients make money, which projects overran, and how much of the cash in the bank belongs to the media platforms.
Media mixed in with fees? We separate them and rebuild your margins.
What we do for agencies
We set up the books so every dollar of revenue and every direct cost carries a client and, where it matters, a project. That means classes or tracking categories in QuickBooks or Xero, or dimensions in NetSuite, applied to invoices, contractor bills, media, production and software costs.
Each month you get:
- Revenue, direct costs and gross margin by client
- The same by project for fixed-fee and campaign work
- Agency gross income, meaning fees earned after pass-through costs, which is the figure your margins should be measured against
- Where you track time, labor cost by client from your timesheet tool, so a retainer that runs over its hours shows up
The time data stays in your time tracking or project tool. We bring its totals into the books at the close and reconcile them, rather than asking your team to change how they log hours.
Project work is often billed on milestones or at the end, while the costs arrive as you go. Without a work in progress schedule, a project looks like a loss in the months it is being done and a windfall in the month it is invoiced. We keep a schedule for each open project: costs incurred, amounts billed, and what is earned but unbilled or billed in advance. It is reviewed with your account leads at each close, so the profit and loss statement shows the month you actually had, and you can see which jobs are ready to invoice.
When you buy media or production for a client and bill it back, that money moves through your accounts without being yours. We record it on its own lines: media and production billed to clients, media and production costs, and any markup or commission you earn on top. Client prepayments for media are held as a liability until the spend happens, and platform invoices are matched to the client bills that recover them, so gaps and double billing show up at the close.
Whether media should appear in your statements at the gross billed amount or only as the net fee you earn is an accounting judgment that depends on your contracts and who controls the spend. Your CPA or auditor makes that call. Because the costs sit on separate lines, either presentation can be produced from the same books without rework. For agencies that also want help running the campaigns themselves, Atidiv’s media operations team supports campaign execution.
A retainer paid at the start of the month for work across the month is earned as the work is done. A client that prepays a quarter has given you three months of obligation, not three months of revenue. We record retainers and prepayments as deferred revenue when billed and recognize them over the period or as the hours are used, whichever your contract says. Where a retainer includes unused hours that roll over, or a cap that triggers overage billing, we track the balance per client so account leads can see it before the client asks.
Most agencies rely on freelancers, and they bring paperwork. We collect a Form W-9 from each contractor before their first payment, so the name and taxpayer identification number are on file. We code every contractor bill to the client and project it serves, so freelance cost appears in project margins.
At year end we prepare Forms 1099-NEC. For payments made in 2026 onward, the IRS instructions for Forms 1099-MISC and 1099-NEC (December 2026 revision) say the form reports $2,000 or more paid for services by someone who is not your employee, up from $600 for 2025 and earlier, and it must be filed with the IRS and furnished to the recipient by January 31. Payments to corporations generally do not need one, with exceptions such as attorneys’ fees. If a contractor does not provide a taxpayer identification number, backup withholding can apply.
Whether a person is a contractor or an employee is a separate question. The IRS looks at the whole relationship: behavioral control, financial control and the type of relationship, with no set number of factors that decides it. We flag long-running, full-time freelancers for review. The classification decision stays with you and your adviser.
How it starts
All of this sits within our finance and accounting services, where the same team can add accounts payable, budgeting, forecasting and fractional CFO support as you grow.
We look at your books, client contracts, billing method, time tracking and contractor list, and list what is missing or miscoded.
We agree a chart of accounts built for an agency, with fees, pass-through costs and markups on separate lines, and client and project tracking applied to every transaction.
If past months mixed media with fees or booked retainers as cash, we restate them so the history is usable.
From then on, we reconcile, close and report every month, and review client margins with you.
Cash, receivables and the monthly close
Agencies often pay media and freelancers before clients pay them. Each month we reconcile bank, card and platform accounts, report every overdue invoice by client and age, follow up on them only where you ask us to, and produce a profit and loss statement by client, a balance sheet with work in progress and deferred revenue, and a cash view that separates client media money from your own. For deeper management reporting, see our financial reporting services.
How pricing works
Price depends on the number of clients and projects, monthly transaction volume, whether you pass through media, how many contractors you pay, and how far behind the books are. Pricing is custom, and there are two ways to engage. A fixed monthly retainer covers ongoing bookkeeping and the close, based on volume, entities and complexity. A project covers a one-time clean-up, a migration between accounting systems, a software set-up or a backlog. The proposal follows the review.
Frequently asked questions about agency accounting
Yes. Every invoice and direct cost is tagged to a client, and where you track time, labor cost is brought in from your timesheet tool at each close. You get margin by client each month.
On separate lines from your fees, with client prepayments held as a liability until spent. Gross or net presentation is decided with your CPA, and the books support either.
Yes. We collect W-9s before first payment, track payments through the year, and prepare Forms 1099-NEC for filing by January 31.
It is the value of project work done but not yet billed, or billed ahead of the work. If you bill on milestones or at the end of projects, you need it to see real monthly profit.
QuickBooks, Xero and NetSuite. We work in your file, so your CPA and your team keep their access.
Yes. Hours stay in the tool your team already uses. We take its totals at the close and reconcile them to the books.