Guide
Monthly management report for a marketing agency
A marketing agency's monthly management report must show how much of the team's time was billed, what each client earns after the cost of delivering the work, how dependent the agency is on its largest clients, revenue per head, work done but not yet invoiced, and how quickly clients pay. Below: each KPI with its formula, why it matters and where it comes from in Xero or QuickBooks Online, then a worked example.
Updated
What KPIs should a marketing agency track monthly?
Utilization of the billable team, revenue per head, client concentration, gross margin by client or retainer, unbilled time and days sales outstanding. Together they show whether the team's hours turn into invoices, which clients actually make money, how exposed the agency is to losing one account, and how quickly billed work becomes cash.
| KPI | Formula | Why it matters | Where it comes from |
|---|---|---|---|
| Utilization | Billable hours ÷ available hours, per person and for the delivery team, where available hours are contracted hours less holidays and leave. | Hours are what an agency sells: an hour that is not billed is cost with no revenue against it. | Xero: Project Detailed Time, when time is tracked in Xero Projects. QuickBooks Online: Time Activities by Employee Detail. Available hours come from your staff schedule. |
| Revenue per head | Revenue for the month ÷ headcount. If media is billed through you, use net revenue, after pass-through costs. | It shows whether revenue grows faster than the team, the usual check before a new hire. | Revenue from the Profit and Loss in either ledger; headcount from payroll. |
| Client concentration | Largest customer as % of total revenue: the largest client's revenue ÷ total revenue for the month. | It shows how much of the agency one client's notice would take with it. | Xero: Income by Contact. QuickBooks Online: Sales by Customer Summary. |
| Gross margin by client or retainer | (Project revenue − delivery cost) ÷ project revenue, per client or retainer, where delivery cost is staff time at cost plus freelancers and other direct costs. | A busy client can still lose money, and the blended gross margin hides which one. | Xero: Project Summary, or the Profit and Loss filtered by a tracking category set up for clients. QuickBooks Online: Profit and Loss by Customer, or Project profitability. |
| Unbilled time (WIP) | Hours worked and not yet invoiced × the bill rate, or the share of a fixed fee already earned. | Work done and not invoiced is cash the agency is financing, and revenue at risk of being written off. | Xero: Project Detailed Time shows which time entries have not been invoiced. QuickBooks Online: Unbilled time and expenses, on the project's Project Reports tab. |
| DSO | Receivables ÷ revenue for the period × days in the period. | It shows how long billed work takes to become cash; read it with receivables by age to find the slow payers. | Xero: Aged Receivables Summary and Profit and Loss. QuickBooks Online: A/R Aging Summary and Profit and Loss. |
How do I calculate utilization for an agency?
Divide billable hours by available hours for the same people and the same period. Available hours are contracted hours less holidays and leave; billable hours are those spent on client work, whether it is invoiced by the hour or covered by a retainer. Calculate it per person and for the delivery team.
- Available hours = contracted hours in the month − holidays, leave and sick days.
- Billable hours = hours recorded against client projects and retainers.
- Utilization = billable hours ÷ available hours × 100.
- Effective rate = fee revenue ÷ billable hours, to see what an hour actually earned.
Leave people whose job is not billable, such as finance or new business, out of both figures, or report them as a separate line, so the figure describes the team that sells its time.
How do I see gross margin by client?
Record each client as a project, or as a tracking category in Xero or a customer in QuickBooks Online, and post delivery costs to it: freelancers, media bought for that client and staff time at cost. Revenue minus those costs, divided by revenue, is the client's gross margin for the month.
- Cost staff time. Hours × each person's cost per hour, salary plus payroll taxes and benefits, so a client that uses senior people carries their cost.
- Separate pass-through costs. Media and printing billed at cost add revenue but no margin; show them apart so they do not dilute the figure.
- Compare retainers with projects. A retainer that absorbs more hours than its fee covers shows up here first.
- Then look below the line. Contribution margin and operating margin show what the clients together leave once overhead is paid.
What does an agency's monthly report look like?
An excerpt from the April 2026 report of Northcraft Studio, the agency in the sample. Figures from Ataski's sample company (fictional). The company does not exist; its figures are the sample data of the Financial Analyst's sample workspace, where you can open the agency sample.
| Line | Apr 26 | Mar 26 |
|---|---|---|
| Revenue | $560,000 | $546,341 |
| Cost of revenue | $246,400 | $240,390 |
| Gross profit | $313,600 | $305,951 |
| Operating expense | $251,600 | $249,521 |
| Operating result | $62,000 | $56,431 |
- Utilization: 68%, from 72%, at an effective bill rate of $165 an hour.
- Revenue per head: $23,333 for the month, with 24 people on the payroll.
- Client concentration: the largest client is 29% of revenue.
- Gross margin: 56.0% across all clients; retainers are 54% of revenue, from 49%.
- DSO: 52 days, with receivables of $362,000, of which $22,000 is over 90 days; cash of $286,000.
- Not in the sample: unbilled time and gross margin by client are not reported.
For comparison: advertising agencies (SIC 7311) fall in the Business & consumer services group (SIC 7000-8999) of Ataski's study of small US public companies with revenue of $1 million to $250 million. That group's median DSO was 39.4 days (middle half 19.5–70.8 days), across 61 companies, FY2025 10-Ks. The group mixes many kinds of service business, so treat it as a reference point, not a target. Source: Ataski analysis of SEC Financial Statement Data Sets (FY2025 10-K filings).
From the sample report's commentary
“Billable utilization slipped to 68% from 72% — the Calderon project wrapped before the next retainer staffed and two designers sat on bench for ~90 hours. At the effective rate that is ~$15K of unbilled capacity for the month.”
“Retainer share rose to 54% of revenue from 49% — two project clients converted to monthly retainers, smoothing the lumpy project cycle. The worker booked the full annualized lift; the supervisor wanted to discount early-stage retainer churn risk, so the call routed to your inbox.”
“DSO stretched to 52 days from 49 — a project client disputed a change-order line and held the final invoice, leaving $22K past 90 days. The retainer base still collects on time; the lumpiness is concentrated in the project book.”
Each note gives the measure, its move and the client or project behind it, the pattern described in the commentary section of the monthly management report template.
What else belongs in an agency's monthly report?
These KPIs sit inside an ordinary management report: a short summary, the profit and loss against budget and the prior month, the balance sheet, a cash forecast, commentary on what moved and why, and the actions with an owner and a date. The monthly management report template sets out each section; the DSO calculator works out days sales outstanding from three figures.
Or have it written for you
Ataski's Financial Analyst writes the monthly management report from your accounting system, with a scorecard, the profit and loss against the prior month, the same month last year and the budget, and a cash and working capital page with days sales and payables outstanding.
- Your ledger. QuickBooks Online and Xero; NetSuite, Sage Intacct, Zoho Books and Business Central in beta.
- Every month on the 1st. The report is refreshed on the 1st of every month for the month just ended, as a draft that waits for your approval.
- History from day one. The first connection reads the trailing 24 months, so the first report already compares each month with the same month last year.
- Cash, 13 weeks out. A weekly cash forecast beside the open invoices and bills falling due.
- A second reviewer. A second, independent AI reviewer reads every monthly narrative, and an AI explanation that cites a source outside your books is discarded, not published.
Plans start at $599/mo. The first month is free, and no card is needed to start it.
Questions
What is the difference between utilization and realization?
Utilization is the share of available hours that went to billable work. Realization is the share of the value of those hours that was actually billed, after write-downs and fixed-fee overruns. An agency can be fully booked and still lose money when realization is low.
Should pass-through media spend count in revenue per head?
Media and other costs passed through to clients inflate revenue without using the team's time. Many agencies also report net revenue, after pass-through costs, and calculate revenue per head and margins on it, so the figures do not swing with a client's media budget.
How much client concentration is too much?
There is no single threshold. Watch the largest client's share of revenue every month, and ask what would happen to the team and to cash if that client gave notice under its contract.
What counts as unbilled time?
Hours worked for clients that have not been invoiced yet: hourly work before the next invoice, fixed-fee work ahead of the next milestone, and extra work not yet agreed with the client. Review it monthly, so nothing is written off simply because it was forgotten.