Bookkeeping for marketing agencies

The short answer: an agency needs the same basic bookkeeping as any company, plus four things. Money that only passes through you, such as ad spend, printing or a freelancer billed to a client, has to sit apart from your fees. Retainers paid before the work need tracking. Freelancers need a W-9, and for 2026 payments of $2,000 or more, a Form 1099-NEC. If you buy media for clients, you need to see what you owe vendors and when. Bookkeeping alone costs about $199 to $1,200 a month at the firms listed below. Monclose takes on the whole routine around the books for $4,500 to $6,500 a month.

Money that only passes through

Ad spend, printing, stock images, software bought for one client, a freelancer you bill on: the client pays for all of it, and you pass most of it on. If it sits in the same accounts as your fees, your revenue looks bigger than it is and your margin looks smaller.

Many agencies track agency gross income: revenue minus pass-through costs. It shows what the agency earned for its own work, and it's the number to measure profit against.

How pass-through costs appear in your formal statements is a separate question. Under the revenue rules (ASC 606), it depends on whether you control the media or the service before the client gets it. If you only arrange the purchase, you usually report just your fee. If you buy it, carry the risk and set the client's price, you usually report the full amount. Your CPA decides this from your contracts.

For the books, the rule is simple: keep pass-through costs in their own accounts and tag each one to a client.

Costs you meant to bill
A cost you planned to pass on to a client is easy to forget. Tag it to the client when you enter it, so it lands on that client's next invoice. QuickBooks Online can mark an expense as billable to a customer and add a markup. Intuit's support says this needs the Plus plan or higher.
Once a month, look for costs marked billable that never reached an invoice.
Retainers paid ahead
A retainer paid on the 1st covers work you haven't done yet. In accrual books, the part you haven't earned yet is recorded as a liability (deferred revenue) until you do the work. In cash books, it counts when the money arrives. Your CPA chooses the method.
Either way, your books should show which clients have paid ahead and which owe you for work already done.

Freelancers and 1099s

If a W-9 is missing, ask for it in December. In late January everyone is asking at once.

Get a Form W-9 before you pay a freelancer for the first time.
For payments made in 2026, file Form 1099-NEC for each freelancer you paid $2,000 or more for services. Until the end of 2025 the line was $600.
Send it to the freelancer and file it with the IRS by January 31. In 2027 that day is a Sunday, so the deadline moves to Monday, February 1.
Payments by credit card or through a third-party payment network are reported by that payment company on Form 1099-K. They don't go on your 1099-NEC.
Payments to corporations are generally exempt. Payments for legal services are one of the exceptions.
Whether someone is a contractor or an employee depends on the whole relationship. The IRS looks at who controls how the work is done, who controls the business side of the job, and what kind of relationship it is.

Media bills when a client pays late

If you buy media for clients, the vendor's invoice and the client's payment rarely arrive together. Agency contracts often say who carries that gap. One agency's standard client terms, for example, say it "attempts to obtain sequential liability" from media vendors: it owes the vendor only once the client's money has cleared. Vendors don't always agree to that. Read what your own contracts say before a client is late.

Your books should show the money you're holding for media, what you owe each vendor, and when it's due.

What to check every month

1
Pass-through costs sit in their own accounts, each tagged to a client.
2
Every cost marked billable is on an invoice.
3
You know which clients have paid ahead and which are behind.
4
Every freelancer paid this year has a W-9 on file, with a running total of what you've paid them.
5
You can see the money held for media and what is due to vendors this month.
6
You look at profit by client, after freelancers and pass-through costs, at least once a quarter.

What it costs

Option	Price	What you get
Bench	$199 a month for Grow, $399 for Core, billed monthly	Monthly books, a year-end package for your taxes and 1099 reporting. Paying bills and reminding clients aren't listed
Catalyst CPA, an accounting firm for agencies	From $250 a month, $500 to $1,200 with profit by client	Every account reconciled, statements that separate your fees from pass-through spend, and a profit report by client
Bookkeeper360	From $400 a month, plus from $150 a month for bill pay and invoicing	Books kept, with bill pay and invoicing as an add-on
A bookkeeper on staff	About $72,000 a year with benefits	One person doing what you ask. How we worked this out.
Monclose	$4,500 a month for 20 to 49 people, $6,500 a month for 50 to 100	Bills checked, clients reminded in your name, the bank matched every week, the month closed on a date in your contract, and a page every Monday

Prices are the ones on each firm's own site on 3 November 2026. Most are starting prices, and quotes rise with volume.

Where we fit

If your agency has 20 to 100 people and nobody has time for this routine, we do it. One named person reads every bill and checks it against the vendor's last one and what you agreed. Clients who owe you get a polite reminder in your name, worded the way you approved. We match the bank every week and close the month on a date written into your contract. Every Monday you get one page: how much money you have, who owes you and what to pay this week. Your tax accountant gets what they need, on time.
If you already have a careful bookkeeper and mainly need clean books, one of the cheaper options above is the better choice.

We're new

We haven't worked with outside clients yet, so we have no agency clients to show you. We're starting with a small group of firms. If it isn't working for you in the first 60 days, we refund the setup fee.

Questions

Does a marketing agency need a specialist bookkeeper?

Not always. It needs someone who keeps pass-through costs apart from fees, tracks retainers and keeps freelancer records. Ask any bookkeeper how they handle those three.

Is ad spend part of our revenue?

In the numbers you run the agency by, keep it apart from your fees. In formal statements, it depends on whether you act as principal or agent under ASC 606, and your CPA decides.

What is the 1099-NEC threshold for 2026?

$2,000 for payments made in 2026, up from $600. The forms are due by February 1, 2027, because January 31 is a Sunday.

Do you file our 1099s?

No. We don't file taxes or tax forms. We give your tax accountant the list of freelancers, their W-9s and what each was paid.

Do we have to change our accounting program?

No. Your books stay in your own QuickBooks or Xero, on your login.

Show us how one bill gets paid today.

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Sources

Rules and prices checked on November 3, 2026.