Top 5 Best Accounting Softwares for Marketing Agencies

8 min read

May 14th, 2024

For the modern, growing marketing agency, accounting software is necessary for running a financially healthy, compliant, and successful business.

 Leveraging the features of accounting software and integrated applications, your agency can become more profitable by automating manual processes, improving your payables and receivables, understanding and allocating costs to optimize prices, strengthening your budgeting and financial strategy, improving cash flow, and better managing your revenue streams.

While accounting software can improve your business, you must understand that not all software suites are the same. Each type of software offers a variety of different features and functionalities at different price points. So, it's important to consider your marketing firm's needs and budget before selecting accounting software.

Must-Have Accounting Software Features for Marketing Firms

Most accounting software options offer similar basic features that benefit all businesses. Marketing agencies, however, are service-based businesses with specific financial management needs. This means you should look for accounting software that includes the following features and options that are essential to marketing firms.

Read More: The Pros and Cons of Outsourced Accounting Services for Businesses

Project-Based Accounting

Marketing agencies generate revenue based on projects and individual client relationships. As a result, project or client-based accounting capabilities are a must. These abilities allow you to allocate expenses and track costs respective to each project, client, job, or service so that you can effectively evaluate the profitability of each type of project, client, job, or service provided by your agency.

Without the ability to assess each revenue stream in your agency, it becomes more difficult to strategically improve sales goals and strengthen your business's financial health.

Time-Tracking Integrations

In a service-based business like a marketing agency, your people (and their skills) are your product. As a result, labor is typically going to be your biggest cost, and it's vital that you are able to keep track of how each of your employees spends their time. This enables you to discern between direct labor (i.e. billable hours) and indirect labor (i.e. overhead cost).

Look for accounting software that integrates with a good time-tracking application. This will enable you to improve productivity and billing while also getting a better idea of which types of services and clients are the most profitable for your business and which drain your employees' time and resources without paying off.

Estimates and Billing

Marketing agencies should be able to provide professional-looking invoices after work has been completed and accurate estimates at the beginning of a client relationship. Your accounting software should be robust enough to produce both estimates and invoices, while also automating the invoicing and collections process.

Marketing Firms Need Industry-Specific Accounting!

How much does an outsourced accounting partner cost?

Expense Tracking and Allocation

Tracking expenses is an essential function in business because knowing your costs is the first step to optimizing your prices and being profitable. Expense tracking includes not only managing our payables and maintaining good relationships with your vendors but also tracking other direct and indirect costs. In addition to keeping track of all these expenses, you must also be able to categorize the costs, separating them first into direct and indirect categories before allocating the costs to specific jobs.

Revenue Recognition and Management

Most accounting firms use the accrual-basis accounting method (which is required by the Generally Accepted Accounting Principles, GAAP). This means it is necessary to follow specific rules about when revenue is recognized and recorded in your books. If your accounting firm is using accrual accounting and following GAAP (If it isn't, it should be!), then you need to choose accounting software that supports proper revenue recognition and other GAAP guidelines.

Manual Process Automation

The main reason to use accounting software is that it automates manual processes that otherwise waste your time, energy, and resources. Look for accounting software that provides a high level of automation both within the software's basic features and in the form of fully integrated third-party applications.

Enterprise Resource Planning (ERP)

Yes, accounting software is accounting software, and if that's all you need, then disregard this feature. However, accounting software can be so much more. With the right accounting software and fully integrated applications, your accounting software can function as an ERP tool that helps you operate your entire business more efficiently and effectively.

If you want the entire management of your business consolidated and streamlined into a single platform, then choose accounting software with integrations and customizability designed to support ERP functionality.

Our Top 5 Picks: The Best Accounting Software for Marketing Firms

1. Sage Intacct

Sage Intacct is one of the most customizable accounting software suites available on the market. The software is comprised of individual modules that are hand-selected to meet each business's needs. Additionally, it can be enhanced and expanded with hundreds of fully integrated, third-party applications. Sage Intacct comes at a higher cost compared to other accounting software options, which can make it less attractive to smaller businesses. For fast-growing or medium-sized businesses, however, its customizability, scalability, flexibility, and robust functionality as an ERP tool can provide a high ROI.

2. QuickBooks

QuickBooks, in its desktop and online versions, is one of the most popular business accounting software suites for small and medium-sized businesses. While the software is less customizable and flexible than Sage Intacct, its features can be manipulated and adjusted to suit your business's needs. Additionally, the cloud-based online version offers a variety of integrations that can be used to expand the basic software's capabilities. Several different levels of QuickBooks, offering a variety of different features and capacities, are available, making it a highly affordable option for SMBs.

Read More: 10 Reasons Why Your Marketing Agency Should Outsource Your Accounting  

3. Xero

Xero features a user-friendly interface, unlimited users at every subscription level, and a customizable interface that works well for many small businesses. It is also very reasonably priced with subscriptions ranging from $15 to $78 per month. Additionally, it boasts more than a thousand options in integrated applications. The primary drawback is that monthly invoices and bills are strictly limited, and person-to-person customer support is non-existent.

4. FreshBooks

FreshBooks is a good entry-level accounting software that is primarily tailored to accommodate start-ups or freelancers. It does, however, offer fairly robust project-based accounting options. With a low price point, it can be a good option for smaller agencies that do not require multiple users.

5. Wave

Wave is one of the most affordable accounting software options with a free version and pro version at just $16 per month. While inexpensive, Wave's features are fairly limited. However, it can work well for small agencies with low transaction levels that need basic invoicing, record consolidation, and basic reports.

How to Choose the Accounting Software That's Right for Your Marketing Agency

Choosing accounting software for your business is a big decision. It's an investment that you'll make in your marketing agency, and choosing the right (or wrong) software can have a major impact on your firm's operations, management, performance, and success. To select the software that's best for your business, you first need to understand your agency's needs and goals. When you have a clear understanding of what you hope to get out of your accounting software, you can begin comparing your options.

The Top 6 KPIs For Marketing Firms 

The ultimate guide in helping your marketing agency track profitability and performance. 

[FREE DOWNLOAD]

Use the following steps to identify the accounting software that's right for your marketing firm:

1. Make a list of the features your business must have in its accounting software. Any software that does not include these features should be removed from your list of options.
2. Next, make a list of the features that would be nice to have. This can include features that would be useful but aren't completely necessary.
3. Looking at your current list of possibilities, review the automation features available to you. These features save time and improve the ROI you will get from accounting software. The more (high-quality) automation, the better.
4. You should also look over the list of integrations that each accounting software option will support. Consider whether other applications you currently use will integrate with the software and the types of new integrated applications that will be available to you.
5. Finally, you should look at the cost of each of the software options still on your list of possibilities. Compare the cost while considering the features, options, and advantages that each choice presents.

The best choice is an accounting software suite that is cost-effective and also meets your needs while remaining flexible and scalable to support your agency as it grows and changes.

Outsourced Financial Management and Accounting Software for Small Businesses

Marketing firm leaders do not have to navigate the challenges of choosing, setting up, and using business accounting software all on their own. With an outsourced back office, your experienced client accounting service provider (CAS) can help you determine the accounting software that can best meet all of your business's needs while providing you with the tools, data, and analysis needed to strengthen your business.

When partnering with an outsourced accounting, the best option for marketing firms are CAS providers that specialize in service-based businesses and have experience working with businesses in the marketing industry. These professionals will already understand the ins and outs and unique needs of your marketing agency, and they will be able to help you take your agency to the next level with a high-powered back office that is designed to help you run and improve your business.