The 6 Financial Reports Every Marketing Agency Should Review Monthly

Most marketing agency owners track revenue.
Far fewer consistently review the financial reports that actually determine profitability and cash flow.

You can be growing, winning new clients, and still feel like cash is tight.

That’s usually because the wrong numbers are getting reviewed—or not reviewed at all.

While this is written with marketing agencies in mind, these reports apply to most service-based businesses with only minor variations.

After working with agencies for nearly 15 years, I’ve found that the ones that review the right reports—and take action on them—tend to grow more predictably and profitably.

Below are six financial reports every agency owner should be reviewing monthly.

1. P&L Comparison

A Profit & Loss (P&L) Report alone has some value, but it means much more when there is context. I recommend reviewing a report that provides you with the P&L and compares the following:

• Monthly comparison to last year, budget, and the previous forecast
• Year-to-date (YTD) comparison to the previous year, budget, and previous forecast
• Full-year forecast to the previous year, budget, and last forecast.
• Next year's forecast (This is most important after mid-year).

Reviewing these reports lets you understand where you are in your agency and where you are headed. You catch expenses that may be getting out of hand—the trends in your business. To build this report, I recommend building out a monthly P&L until the end of the year and maybe next year, depending on where you are in the year.

2. Revenue Comparison

Take a look at your revenue by client and compare revenue to the prior year, budget, and forecast. I would recommend a similar approach as the P&L comparison in that you look at the month, YTD, full-year, and maybe next year.

Understand your existing revenue, prospect revenue that has not closed, and unidentified business needed to hit your yearly goal.

3. Client Profitability

I often see agencies where 20–30% of clients are actually unprofitable once time and labor are fully accounted for. Without reviewing client profitability regularly, it’s almost impossible to spot this early—and even harder to fix.

A Client Profitability Report can take time to produce. Start with your P&L and revenue by client reports, as mentioned above. Combine these reports with employee salaries and time spent by client. This report is valuable because it will tell you which clients are unprofitable and which one is carrying the load for the business. Clients that took more time and were not priced appropriately will typically be unprofitable or below the margin you desire.

This is a bit easier to produce if you have a good time system. If not, survey your employees each quarter to know the percentage of time they spend per client. Then, you have all the pieces to build this report.

Reviewing this report regularly and taking action on the results will eventually lead you to more profitability. Don't be surprised when you conclude that you must stop working with some clients. It will also inform your future pricing decision, so new clients will produce the margin you want.

4. Balance Sheet

This report is looked at the least as it is the hardest to understand. This report provides insight into where your cash is going. It informs of Accounts Receivables, Debt, and other accruals. Without reviewing this report, you may be profitable, especially if you practice accrual basis accounting but do not have cash. The answers are on the Balance Sheet. If your Balance Sheet is clean and reconciled, you can safely rely on the numbers on the P&L.

5. Weekly Cash Flow

Many businesses run tight with cash and have to dip into a Line of Credit to continue to pay vendors or employees. There is nothing wrong with this. I know many agencies carry large passthrough expenses, and seasonal exposure makes cash fluctuate over the year and even the month. A weekly cash flow will help you understand the cadence of how customers pay, due dates for vendors, credit card payments, and payroll. Also, payments such as taxes, fixed assets, or bonuses can be forecasted to understand their impact.

6. Revenue Forecast

Agency growth becomes far more predictable once you begin forecasting revenue consistently.

A strong revenue forecast typically includes:

• Existing client retainers

• Known project revenue

• Pipeline opportunities

• Capacity constraints

Without a forward-looking view, agencies often fall into a cycle of strong months followed by unexpected slowdowns.

A revenue forecast helps you make better decisions around hiring, pricing, and growth—before issues show up in your financials.

Start Building Better Financial Visibility

Most agencies—and service businesses in general—don’t struggle because they lack data.

They struggle because they’re not consistently reviewing the financial signals that actually drive profitability and cash flow.

Building these reports takes time. But once they’re in place, they give you clarity into where your business stands today—and where it’s heading next.

If you want a deeper framework for forecasting revenue and managing cash flow, download the guide above.

And if you'd like help applying this to your business, you can schedule a time to connect with Shane here:

Not sure where to start? Schedule a Financial Clarity Conversation and walk through your numbers with Shane →