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Project profitability, retainer revenue recognition, media pass-through accounting, time tracking reconciliation, utilization reporting. Built for agencies that want to know which clients and which service lines actually make money.
Agency scope
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Agencies typically run on blended billable rates and high-level P&Ls that don't reveal the truth: some clients are subsidizing others. A high-revenue client that eats 50% of senior staff time may actually be less profitable than a smaller, well-scoped client with clean deliverables. Without project-level profitability reporting, agency leaders make hiring, pricing, and client-retention decisions on incomplete data.
Most agency accounting problems trace back to a weekly discipline that isn't happening: reconciling tracked billable hours against invoiced hours and collected revenue. If someone logs 30 hours on Client A but only 20 show up on the invoice, that's a 33% realization gap – which is fine if it's deliberate (fixed-price project) but catastrophic if it's accidental (hours lost to scope creep, forgotten billing, or poor project management). Offshore agency-trained accountants run this reconciliation weekly and flag realization variances above threshold for owner review.
Agencies that buy paid media for clients (Google Ads, Meta, LinkedIn) often book the full media spend as agency revenue with media cost as COGS. This inflates revenue and confuses margin analysis. The correct treatment under ASC 606 depends on whether the agency is acting as principal or agent in the media transaction. For most retainer and project structures, agency-principal treatment is wrong – it should be net (agency fee only) as revenue. Offshore accountants trained on agency work structure this correctly at setup so the P&L reports agency economics, not inflated pass-through revenue.
The single best leading indicator of agency health is utilization – billable hours as a percentage of total capacity. Target for most agencies: 70–80% for senior staff, 80–90% for junior. Below that, the agency has too much bench time; above that, burnout and quality issues start. Offshore accountants report utilization weekly, broken out by role and practice area, so hiring decisions happen at the right time.
Agency engagements typically pair offshore bookkeeping with monthly financial reporting. For broader offshore accounting context, see our homepage.
FAQ
Yes. All major time tracking tools integrate with QBO or Xero – we manage the sync, reconcile time to invoices, and post revenue properly.
Monthly retainer revenue recognized at the monthly level. Unused hours in retainer tracked as a liability (contract liability under ASC 606). Policy-specific rollover rules coded into the reporting.
Multi-entity agency structures are common. Shared-service cost allocation, intercompany eliminations, consolidated financials for ownership reporting.
For agencies tracking CAC/LTV on behalf of SaaS clients as part of deliverables, yes – but this is usually client-facing strategy work, not accounting. We build agency-side profitability by client including these clients.
ASC 606 principal-vs-agent analysis at engagement setup. Most retainer and SOW structures should be net (agency fee only). Media buying with agency-of-record agreements may be principal. We work this through at onboarding.
Yes. Mavenlink (now Kantata), Scoro, WorkflowMax, and similar agency PSA platforms are standard. We sync them with the accounting system and reconcile project financials monthly.
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