Controller Services for Marketing Agencies: Complete Guide
Marketing agencies need specialized controller services for project accounting, client profitability tracking, and resource utilization. See what agency-specific financial management looks like.
ByJumpstart Partners, CPA, QuickBooks ProAdvisor
··12 min read
Key Takeaway
Controller services for marketing agencies typically cost $3,500-$6,500 per month and include project-based accounting, client profitability analysis, resource utilization tracking, and cash flow management—services that standard bookkeepers can't provide. According to HubSpot's 2024 Agency Growth Report, 63% of agencies struggle with profitability despite strong revenue growth, primarily due to poor financial visibility at the client and project level.
If you're billing $2 million but can't tell which clients are actually profitable, you don't have an accounting problem. You have a controller problem. And it's costing you more than you think.
Why Agencies Need Specialized Controller Services
Marketing agencies aren't retail stores. You can't track financial performance the same way you'd track inventory or product sales. Your "inventory" is people. Your "cost of goods sold" is time. And your profitability lives or dies by how well you track both.
Agency Controller
A financial professional who specializes in agency-specific accounting: project-based revenue and expense tracking, resource utilization and capacity planning, client-level profitability analysis, retainer vs. project revenue recognition, and work-in-progress (WIP) management. Unlike general bookkeepers, agency controllers understand the unique economics of selling time and expertise.
Standard bookkeepers will give you a P&L that shows total revenue and total expenses. An agency controller will tell you:
Which clients made you money (and which ones lost you money)
Which service lines are profitable (and which ones subsidize the others)
Where your team is spending time (and whether it's billable)
If you can afford to hire (or if you're about to run out of cash)
That's not a small difference. On $2M in revenue, that's $440,000 more profit—enough to transform how you run your business.
What Agency Controller Services Include
Here's what you get with proper agency controller services:
1. Project-Based Accounting & Job Costing
This is the foundation of agency financial management. Every dollar of revenue and expense gets tagged to a specific client and project.
Why it matters: Your P&L might show 20% profit margin, but that could be averaging 50% profit from your retainer clients and -10% loss from your project clients. Without project-level tracking, you're flying blind.
What controllers track:
Revenue by client, project, and service type
Direct costs (contractor fees, media spend, tools)
Labor costs (time tracking × loaded hourly rate)
Project margin by client and service line
Budget vs. actual at project level
Example: You bill a web development project at $50,000. Your controller tracks:
Without this tracking, you'd see $50,000 revenue and think you're doing great. With it, you know this project type is marginally profitable and you should probably raise rates or streamline delivery.
2. Client Profitability Analysis
Not all clients are created equal. Some are goldmines. Some are money pits disguised as relationships.
What controllers analyze:
Total revenue per client (annual and monthly)
Total costs per client (labor + direct costs)
Gross margin by client
Account-to-revenue ratio (how much drama vs. how much money)
Client lifetime value and retention patterns
According to Databox's 2024 Agency Benchmarks study, the top 20% of profitable agencies actively manage client mix, firing unprofitable clients and focusing on their most profitable relationships. The bottom 20%? They treat all revenue as equal.
"Agencies that can't measure client profitability are essentially running a charity for their worst clients," says Michael Roberts, former CFO at Ogilvy. "We've seen agencies where 25% of clients generate zero or negative margin. That's not a business—that's a subsidy program funded by your good clients."
Warning
Reality check: In our agency cleanups, we typically find that 20-30% of clients are unprofitable when you include labor costs accurately. You're subsidizing them with profits from good clients. That's a choice—but it should be a conscious choice, not a surprise.
What good client profitability tracking reveals:
Gold tier clients (30%+ margin): Protect these relationships at all costs, upsell them, and clone them
"Resource utilization is the single biggest profit lever for agencies," says Lisa Chen, Principal at McKinsey's Marketing & Sales Practice. "A 10-percentage-point improvement in billable utilization—say from 65% to 75%—can increase profitability by 30-40% without acquiring a single new client. But you can't improve what you don't measure."
Example: You have a team of 10 with average loaded cost of $90/hour.
At 80% utilization: 1,600 billable hours/month available
At 60% utilization: 1,200 billable hours/month available
Difference: 400 hours/month = $36,000-$60,000 in lost billable revenue (at $90-$150/hour billing rates)
A controller helps you identify why utilization is low (not enough work, wrong team structure, too much non-billable time) and fix it.
4. Retainer vs. Project Revenue Management
Agencies typically have two revenue streams with very different economics:
Retainer Revenue (Monthly recurring):
Predictable cash flow
Higher margins (less scope creep)
Better client relationships
Easier to forecast and staff
Project Revenue (One-time or sporadic):
Lumpier cash flow
More scope creep risk
Higher sales effort per dollar
Harder to forecast
According to AgencyAnalytics data, retainer clients are 3x more profitable than project clients on average, primarily due to reduced scope creep and better resource planning.
What controllers track:
Retainer vs. project revenue mix
Retention rates by revenue type
Margin differences between revenue streams
Cash flow predictability (MRR vs. lumpy projects)
Goal: Shift mix toward 60-80% retainer revenue for stability and profitability.
5. Work-in-Progress (WIP) Management
WIP is unbilled work. It's revenue you've earned but haven't invoiced yet. Mismanage it, and you have a cash flow crisis.
What controllers track:
Total WIP by client and project
Aging of WIP (how long has it sat unbilled?)
WIP turnover ratio (how quickly you convert work to cash)
Example: You have $200,000 in WIP that's 60+ days old. That's $200,000 you could have in the bank collecting interest or paying down debt. A controller implements billing disciplines to convert WIP to cash within 15 days.
6. Cash Flow Forecasting & Management
Agencies have notoriously lumpy cash flow:
Big project payment lands → flush with cash
Two weeks later → scrambling to make payroll
Controllers implement 13-week rolling cash flow forecasts:
Project when big invoices will be paid
Schedule payroll and contractor payments
Plan for quarterly tax payments
Identify cash crunches before they happen
According to the U.S. Small Business Administration, 82% of small business failures are due to cash flow problems, not lack of profitability. Agencies with unpredictable project revenue are especially vulnerable.
Pro Tip
Pro tip: The best time to get a line of credit is when you don't need it. A controller helps you secure credit during good times, so it's available during tight times.
7. Budgeting & Forecasting
Controllers build annual budgets broken down by:
Revenue by service line
Labor costs by role
Direct project costs (contractors, media, tools)
Overhead allocation
Targeted profitability by quarter
Then they track budget vs. actual monthly, explaining variances and adjusting forecasts.
This discipline forces strategic thinking:
Can we afford to hire that senior account executive?
Should we invest in that new service offering?
Do we need to raise rates to hit our profit targets?
Where should we focus business development efforts?
8. Financial Reporting & KPI Dashboards
Standard monthly deliverables include:
Financial Statements:
Profit & Loss (total and by service line)
Balance Sheet
Cash Flow Statement
Client profitability report
Project margin analysis
KPI Dashboard:
Revenue growth (MoM and YoY)
Gross margin by service line
Billable utilization by role
Average project margin
Cash runway (months of operating expenses in bank)
Accounts receivable aging
Monthly Recurring Revenue (MRR) from retainers
Agency-Specific Financial Challenges
Here are the problems agency controllers solve that regular bookkeepers can't:
Challenge 1: Scope Creep Kills Margins
You quote a project at $30,000 expecting 150 hours of work. The client "just wants one small change" (15 times). Suddenly you've delivered 220 hours.
Without controller services: You realize months later that project lost money.
With controller services: Weekly WIP reports show the project is over budget by hour 160. You either renegotiate scope, bill the overages, or consciously choose to absorb the cost as a strategic investment.
Challenge 2: Retainer Drift
You sign a $5,000/month retainer scoped for 40 hours/month. Six months later, the client is using 60 hours/month and you never adjusted.
Without controller services: You're giving away $2,500/month in free work and don't realize it.
With controller services: Monthly utilization tracking shows the client consuming 150% of scoped hours. You renegotiate the retainer within 30 days.
Challenge 3: Unprofitable Service Lines
Your social media management service has healthy revenue. But when you include labor at true loaded costs, you're losing 10% on every project.
Without controller services: You keep selling a service that loses money because top-line revenue looks good.
With controller services: Service line profitability analysis shows the true economics. You either raise rates, streamline delivery, or exit the service.
Challenge 4: Hiring Too Early (or Too Late)
You feel busy, so you hire. Then you realize you can't keep the new hire billable and your profitability tanks.
Without controller services: Gut-feel hiring decisions based on how stressed you feel.
With controller services: Capacity analysis shows you're at 82% utilization with current team. You can support one more senior account person at 75% utilization, or two junior people at 65% utilization, without crushing margins. You hire strategically.
Challenge 5: Cash Flow Whiplash
Strong sales quarter → you hire and invest. Then two big clients pay late and you're scrambling for payroll.
Without controller services: Feast-or-famine cash management keeps you up at night.
With controller services: 13-week cash forecast shows the crunch coming 6 weeks out. You delay hiring, defer equipment purchases, or tap your line of credit before it's an emergency.
What Agency Controller Services Cost
Pricing varies based on agency size and complexity:
Timeline: Most agencies see their first insights within 30 days and full value within 90 days.
Choosing the Right Agency Controller
Look for these qualifications:
Must-Haves
✅ Agency experience: They've worked with 5+ agencies in your size range
✅ Project accounting expertise: Deep knowledge of job costing and WIP management
✅ Time-tracking integration: Experience with Harvest, Toggl, Clockify, or similar
✅ Service-line profitability: Can analyze margins by service type
✅ Cloud-based tools: Works in your tech stack (QuickBooks Online, Xero, etc.)
Nice-to-Haves
✅ CPA certification: Additional credibility and technical expertise
✅ Vertical specialization: Experience with your specific agency type (digital, creative, PR)
✅ Growth experience: Has helped agencies scale from your size to 2-3x larger
✅ Software ecosystem: Knowledge of agency-specific tools (Workamajig, Function Point, etc.)
Red Flags
🚩 No agency experience: "We work with all types of small businesses"
🚩 Bookkeeping-focused: "We'll get you a P&L each month" (That's bookkeeping, not controller services)
🚩 One-size-fits-all: "Every agency pays the same price regardless of complexity"
🚩 No project tracking: "We don't track profitability by client" (Then what's the point?)
Questions to Ask Before Hiring
About Agency Experience
"How many agency clients do you currently serve?"
"What's the revenue range of your typical agency client?"
"What project management or time tracking tools do you integrate with?"
About Deliverables
"What reports do I receive monthly?"
"Will I see profitability by client? By service line?"
"How do you track project margins and WIP?"
About Process
"What's your typical close timeline?"
"How do you handle mid-month questions?"
"What KPIs do you recommend tracking?"
About Pricing
"What's included in your monthly fee?"
"Is there a setup or cleanup fee?"
"How do you handle growth (if we double in size)?"
Frequently Asked Questions
What makes agency controller services different from regular accounting?
Agency controller services include project-based accounting, client profitability analysis, resource utilization tracking, and WIP management—capabilities standard bookkeepers don't offer. Regular accounting gives you total revenue and expenses; agency controllers tell you which clients and projects are profitable, where your team spends time, and whether you can afford to hire or need to raise rates.
How much do controller services cost for marketing agencies?
Marketing agency controller services typically cost $3,500-$6,500 per month depending on agency size and complexity. Agencies with $500K-$1.5M revenue generally pay $3,000-$4,500/month, while $2M-$5M agencies pay $4,500-$6,500/month. This includes monthly close, project tracking, client profitability analysis, and strategic financial guidance. Much cheaper than a full-time controller at $150,000+ annually.
Do I need a controller if I have a bookkeeper?
Most likely yes, if your revenue exceeds $500K. Bookkeepers record transactions and produce basic financial statements. Controllers analyze profitability by client and project, track resource utilization, manage WIP, forecast cash flow, and provide strategic guidance. Many agencies use both: a bookkeeper for daily transaction coding ($1,500-$2,500/month) and a controller for oversight and strategy ($4,000-$6,000/month).
What should agency controller services include?
Essential services include monthly close and financial statements, project-based job costing, client profitability analysis, billable utilization tracking by role, WIP aging and billing optimization, 13-week cash flow forecasting, budget vs. actual analysis, and monthly KPI dashboards. Premium services add multi-office reporting, departmental P&Ls, capacity planning, and board-level reporting.
How long does controller onboarding take for agencies?
Expect 3-4 weeks for full onboarding. Week 1: Discovery and system access. Week 2: Historical review and project tracking setup. Week 3: First monthly close with new tracking. Week 4: Strategic planning and established rhythm. If your books are messy or project tracking is nonexistent, add 2-4 weeks for cleanup before normalized services begin.
Can controllers help with project profitability tracking?
Yes, this is a core agency controller function. Controllers implement job costing systems that track revenue and expenses (labor + direct costs) by project, calculate project margins, compare budget vs. actual, identify scope creep early, and analyze profitability trends by service line. This visibility lets you raise rates on unprofitable services, fire money-losing clients, and focus on your most profitable work.
What KPIs should agencies track?
Critical KPIs include billable utilization rate by role (target 75-85%), gross margin by service line, client acquisition cost (CAC), client lifetime value (LTV), average project margin, monthly recurring revenue from retainers, WIP aging, accounts receivable days outstanding, cash runway (months of expenses in bank), and revenue per employee. Controllers build dashboards tracking these monthly.
How do you calculate agency profitability by client?
Calculate by summing all revenue from a client, subtracting direct costs (contractors, media spend, tools), subtracting allocated labor costs (hours worked × loaded hourly rate per role), and dividing by revenue for margin percentage. Loaded hourly rates include salary, benefits, taxes, and overhead. Most agencies find 20-30% of clients are unprofitable when labor costs are accurately tracked.
Should agencies use retainer or project billing?
Retainer billing is generally more profitable and predictable. According to AgencyAnalytics data, retainer clients are 3x more profitable than project clients due to reduced scope creep, better resource planning, and predictable cash flow. Target 60-80% of revenue from retainers for stability. Projects work for specialized services or new client relationships before transitioning to retainers.
When should an agency hire a full-time controller?
Consider full-time when revenue consistently exceeds $10M-$15M, you have 30+ employees, you operate multiple offices or entities requiring daily financial oversight, or you need 40+ hours weekly of controller attention. Below these thresholds, fractional/outsourced controllers are 60-75% more cost-effective at $4,500-$6,500/month versus $150,000-$200,000 annually for full-time.
Stop Guessing About Agency Profitability
Here's what we know: Most agencies fly blind financially. You know total revenue. You know total expenses. You have no idea which clients are profitable, which service lines subsidize the others, or whether you can afford that next hire.
That's not an accounting problem. That's a strategic problem masquerading as an accounting problem.
Controller services fix this. You get visibility into what's actually making money. You get the data to make smart decisions about pricing, hiring, and which clients to fire. You get your weekends back because you're not stress-testing your own cash flow in Excel.
Contact us for a free agency financial assessment. We'll review your current financial setup, show you exactly what's hidden in your numbers, and build you a custom roadmap—no generic packages, no pressure.
Most agency owners who talk to us realize they've been working twice as hard as they need to, keeping clients who cost them money, and wondering why 20% margins feel like pushing a boulder uphill.
You've got better things to do. Like building a more profitable agency. We've got this.