For an agency with client retainers and project expenses, which accounting tools best track profitability by client and project?
Data as of Sep 21, 2026 · Based on 326 AI responses from ChatGPT Search and Google AI Mode · See how Parse measures this
Data as of Sep 21, 2026 · Based on 326 AI responses from ChatGPT Search and Google AI Mode · See how Parse measures this
To effectively track profitability by client and project, many agencies pair general accounting software with specialized project management tools. 
Brands AI recommends here
Named in 73% of answers
Named in 60% of answers
Ideal for foundational accounting and expense management. It allows agencies to link income and costs to specific clients, providing a standard, user-friendly approach to tracking project-level financial health.
Named in 54% of answers
Best for agencies needing an all-in-one workspace. It links time tracking and creative work directly to real-time project profitability and budget updates, offering deeper agency-specific reporting than general ledgers.
Named in 53% of answers
Source | Citation share |
|---|---|
 Best Accounting Software for Agencies: 5 Top Options for 2026https://www.ravetree.com/blog/best-accounting-software-for-agencies-5-top-options | 10% |
 Best Project Accounting Software in 2026 (8 Tools)https://www.teamwork.com/blog/project-accounting-software/ | 3% |
 Maximize project profitability with accounting software - Zohohttps://www.zoho.com/books/academy/accounting-trends-and-insights/maximizing-project-profitability.html | 2% |
 8 Best Retainer Management Software for Agencies & Creativeshttps://www.workamajig.com/blog/retainer-management-software | 2% |
 5 Best Agency Billing Software Tools for 2026 (Time Tracking + Pay)https://tmetric.com/best-software/5-best-agency-billing-software-tools-for-2026-time-tracking-pay | 2% |
 Ad Agency Billing Software – Best Tools for Automating Invoicing — Outbound.comhttps://www.outbound.com/ad-agency-billing-software-best-tools-for-automating-invoicing/ | 2% |
Top 10 Project Accounting Software (Paid & Free) in 2026https://productive.io/blog/project-accounting-software/ | 2% |
Best Accounting Software for Advertising Agencies in 2026https://productive.io/blog/accounting-software-for-advertising-agencies/ | 2% |
 Best Agency Client Management Software: 12 Tools Compared - AgencyAnalyticshttps://agencyanalytics.com/blog/agency-client-management-software | 1% |
 The Ultimate 2023 Project Accounting Guide for Agencieshttps://parakeeto.com/blog/the-ultimate-2023-project-accounting-guide-for-agencies/ | 1% |
For an agency with **retainers + one-off projects + employee/contractor time + pass-through expenses**, I’d look beyond basic bookkeeping. The key is being able to calculate: **Client/project revenue − labor cost − contractor cost − direct expenses = gross profit and margin** Here’s how I’d compare the main options:
For an agency with retainers + one-off projects + employee/contractor time + pass-through expenses, I’d look beyond basic bookkeeping. The key is being able to calculate:
Client/project revenue − labor cost − contractor cost − direct expenses = gross profit and margin
Here’s how I’d compare the main options:
| Tool / stack | Client profitability | Project profitability | Retainers | Expense tracking | Best fit |
|---|---|---|---|---|---|
| QuickBooks Online + Harvest | Strong | Strong | Strong | Excellent | Small/midsize U.S. agency |
| Productive + QuickBooks/Xero | Excellent | Excellent | Excellent | Strong | Growing agency focused on margins |
| Xero + Xero Projects | Strong | Excellent | Good | Excellent | Accounting-first agency |
| Accelo | Excellent | Excellent | Excellent | Excellent | Complex retainers/service work |
| FreshBooks | Good | Strong | Strong | Good | Small/simple agency |
This is a particularly practical setup if you're already using QuickBooks. QuickBooks Online Plus/Advanced can assign income, expenses, and labor costs to individual projects and produce project profitability reports.
Harvest adds stronger time tracking and project-budget management, which matters because an agency can have a profitable-looking retainer that becomes unprofitable once you account for senior staff hours.
I'd favor this for a small-to-mid-sized agency that wants relatively straightforward implementation.
If profitability management is the central requirement, this is worth serious consideration. Productive is built around agency workflows—retainers, projects, budgets, resource allocation, time and margins—while QuickBooks or Xero remains the accounting system.
This becomes especially useful when you want to answer questions such as:
Xero is attractive if you want more of the accounting and project-costing workflow in one ecosystem. Xero lets you assign expenses to projects and track project spending and profitability; its guidance also emphasizes combining project expenses with labor/time to understand true delivery cost.
I'd particularly consider this if you have international clients or multiple currencies.
For an agency with substantial ongoing retainers plus projects/service requests, Accelo is unusually relevant. Its current project-financials functionality specifically covers profitability by client/project, retainer performance versus hours delivered, expenses, margins, and forecasting.
The tradeoff is that it's a more substantial operational platform than a simple accounting package.
One important implementation detail: don't organize everything merely around the client. I'd structure it as:
Client → Retainer/Engagement → Project → Revenue + employee time + contractor costs + direct expenses
That lets you see both “Is Client A profitable?” and “Which specific work for Client A is profitable?” QuickBooks, for example, supports project-level income, expenses, labor costs, and profitability reporting.
If you tell me agency headcount, approximate annual revenue, number of clients, and whether you use QuickBooks/Xero already, I can narrow this down to the 1–2 most suitable setups and show how I'd configure the tracking.
For an agency with **monthly retainers + one-off projects + direct project expenses**, I’d look at the accounting system and the project-profitability layer separately. The key is being able to answer: > **Revenue from client/project − labor cost − contractors − direct expenses = gross profit** ### Best options
For an agency with monthly retainers + one-off projects + direct project expenses, I’d look at the accounting system and the project-profitability layer separately. The key is being able to answer:
Revenue from client/project − labor cost − contractors − direct expenses = gross profit
| Tool / stack | Client profitability | Project profitability | Retainers | Expenses | Best fit |
|---|---|---|---|---|---|
| Xero + Xero Projects | Strong | Very strong | Good | Strong | Want accounting + project costing together |
| FreshBooks | Strong | Very strong | Good | Strong | Smaller service/creative agency |
| QuickBooks Online + project/time tool | Strong | Strong | Strong | Very strong | U.S. agency wanting robust accounting |
| Productive + QuickBooks/Xero | Very strong | Very strong | Very strong | Strong | Growing agency where margins are central |
| Scoro/Kantata + accounting system | Very strong | Very strong | Very strong | Very strong | Larger, complex agencies |
Xero is particularly interesting if you want to avoid stitching together too many systems. Xero Projects lets you assign time and expenses to projects, compare actuals with estimates, and monitor project profitability. Its project reports include financials, detailed time, staff time, and project summaries.
This makes sense if your accounting team wants the profitability data reasonably close to the general ledger.
FreshBooks has unusually explicit project-profitability functionality for a smaller agency. Its profitability reporting calculates income, team-member costs based on cost rates, and project expenses, producing profit and margin. Reports can be grouped by client or project.
It also supports applying project time to an active retainer and tracking project-specific expenses.
The important caveat: some of the more sophisticated profitability features are limited to its higher-tier plans.
Intuit's QuickBooks Online is a good choice if your priority is core accounting, invoicing, expenses, AP/AR and tax-ready books, while a dedicated project/time application handles detailed delivery economics.
This approach is particularly useful if you have lots of employees or contractors and need accurate labor cost, rather than simply comparing invoices against expenses.
For a growing agency, I'd consider an agency-management platform such as Productive alongside your accounting system.
The advantage of this architecture is that the accounting system remains the financial source of truth while the agency platform handles things like:
That's particularly useful when the question isn't merely "Did we invoice this client?" but "Did we spend 140 hours delivering a $10,000 retainer?"
Regardless of software, I'd set up the hierarchy roughly as:
Client → Retainer/Engagement → Project → Revenue + employee time + contractor costs + direct expenses
Then report monthly on:
For an agency, that structure is often more important than the accounting product itself.
If you're a small-to-midsize U.S. agency, I'd narrow it to three architectures: Xero + Projects, QuickBooks + dedicated project/time tracking, or Productive + QuickBooks/Xero. If you tell me your approximate number of employees, annual revenue, number of clients, and whether retainers are fixed-fee or hours-based, I can map out the specific setup and reporting structure I'd use.
FreshBooks has unusually explicit project-profitability functionality for a smaller agency. Its profitability reporting calculates income, team-member costs based on cost rates, and project expenses, producing profit and margin. Reports can be grouped by client or project.
It also supports applying project time to an active retainer and tracking project-specific expenses.
The important caveat: some of the more sophisticated profitability features are limited to its higher-tier plans.
Intuit's QuickBooks Online is a good choice if your priority is core accounting, invoicing, expenses, AP/AR and tax-ready books, while a dedicated project/time application handles detailed delivery economics.
This approach is particularly useful if you have lots of employees or contractors and need accurate labor cost, rather than simply comparing invoices against expenses.
For a growing agency, I'd consider an agency-management platform such as Productive alongside your accounting system.
The advantage of this architecture is that the accounting system remains the financial source of truth while the agency platform handles things like:
For an agency juggling monthly retainers, project-based work, and variable pass-through expenses, standard out-of-the-box bookkeeping is rarely enough. You need tools that support **job costing** —tying labor hours and direct expenses to specific clients and projects in real-time. The best accounting and financial…
For an agency juggling monthly retainers, project-based work, and variable pass-through expenses, standard out-of-the-box bookkeeping is rarely enough. You need tools that support job costing —tying labor hours and direct expenses to specific clients and projects in real-time.
The best accounting and financial tracking tools for agencies fall into three main categories depending on your size and operational style:
Agency operators often find that tracking retainers closely prevents unbilled scope creep:
FreeAgent project tracking has changed how I quote. I can see profit per commission and re-quote next time. They actually flagged that two retainers were running thin.
From overservicing retainers by 30% to maintaining healthy margins. Profits up 20% in one quarter. We were hemorrhaging money on retainers. The team would spend 40 hours on a 30-hour monthly retainer without realizing it.
To help narrow down the ideal platform, tell me:
For an agency with **recurring retainers + one-off projects + client-specific expenses**, I’d prioritize tools that can allocate **revenue, employee time, contractor costs, and expenses** to the same client/project. Otherwise, a $20k retainer can look profitable while quietly consuming most of your team’s capacity.…
For an agency with recurring retainers + one-off projects + client-specific expenses, I’d prioritize tools that can allocate revenue, employee time, contractor costs, and expenses to the same client/project. Otherwise, a $20k retainer can look profitable while quietly consuming most of your team’s capacity.
| Tool / stack | Client profitability | Project profitability | Retainers | Best for |
|---|---|---|---|---|
| Productive + QuickBooks/Xero | Excellent | Excellent | Excellent | Agencies where margin management is central |
| QuickBooks Online + Harvest | Very good | Very good | Very good | Small/midsize U.S. agencies |
| Xero + Xero Projects | Very good | Excellent | Good | Accounting + project costing in one ecosystem |
| Scoro | Excellent | Excellent | Excellent | Larger, more operationally complex agencies |
| FreshBooks | Good | Very good | Very good | Smaller/simple service agencies |
productive.io is particularly strong if the question you want answered is “Which clients and projects are actually making us money?”
It is designed around agency operations: projects, retainers, budgets, time, resource costs, utilization and profitability. You can keep QuickBooks as the accounting system of record while Productive handles the operational/project economics. Current agency-focused comparisons also put Productive among the strongest options for project profitability.
I'd choose this if you have 10+ people, multiple concurrent projects, or frequent questions about client margins.
quickbooks.intuit.com has native project/job costing: you can associate labor, materials and vendor costs with projects and see whether individual projects are profitable.
Adding getharvest.com gives you stronger time tracking and project-budget management.
This is probably my default recommendation for a 3–15 person U.S. agency, particularly if your accountant already lives in QuickBooks.
xero.com has unusually good project accounting for a general accounting platform. Xero Projects lets you attach bills, expenses and employee time to individual projects and see revenue, costs and gross margin.
I'd lean toward Xero if you have international/multicurrency clients or want fewer separate systems.
scoro.com goes beyond accounting into agency/project operations. It can show margin by project, client and service line, while tracking retainer utilization and syncing with accounting systems such as QuickBooks and Xero.
It's powerful, but I'd avoid the implementation overhead unless your agency is sufficiently complex to benefit from it.
The most important thing, though, is labor costing. Your reporting should ultimately look something like:
Client → Retainer/Project → Revenue − employee labor cost − contractors − direct expenses = gross profit → gross margin
Xero explicitly recommends tracking both project expenses and time because labor can be the largest project cost.
So if you tell me agency headcount, annual revenue, number of active retainers, and whether employees or contractors are the bigger delivery cost, I can narrow this down to the best 2 choices and a recommended accounting/project setup.
quickbooks.intuit.com has native project/job costing: you can associate labor, materials and vendor costs with projects and see whether individual projects are profitable.
Adding getharvest.com gives you stronger time tracking and project-budget management.
This is probably my default recommendation for a 3–15 person U.S. agency, particularly if your accountant already lives in QuickBooks.
xero.com has unusually good project accounting for a general accounting platform. Xero Projects lets you attach bills, expenses and employee time to individual projects and see revenue, costs and gross margin.
I'd lean toward Xero if you have international/multicurrency clients or want fewer separate systems.
For an agency handling a mix of recurring client retainers and variable project expenses, tracking true profitability requires looking at **labor costs (time)**, **direct expenses (software, contractors, media spend)** , and **recurring revenue**. The top accounting and financial tracking tools best suited for this…
For an agency handling a mix of recurring client retainers and variable project expenses, tracking true profitability requires looking at labor costs (time), direct expenses (software, contractors, media spend) , and recurring revenue.
The top accounting and financial tracking tools best suited for this workflow fall into three distinct tiers depending on your agency's size and complexity:
To help narrow down the ideal choice, tell me:
For an agency managing both recurring client retainers and variable project expenses, tracking true profitability requires capturing two distinct data streams: **time/labor costs** (the team's hours) and **hard costs** (software subscriptions, contractor fees, media spend, or travel expenses). No single tool does…
For an agency managing both recurring client retainers and variable project expenses, tracking true profitability requires capturing two distinct data streams: time/labor costs (the team's hours) and hard costs (software subscriptions, contractor fees, media spend, or travel expenses).
No single tool does everything natively at an elite level, so agencies typically choose between an all-in-one accounting tool with project modules or a best-of-breed operational tool paired with core accounting software.
If your primary goal is seeing real-time margins on retainers vs. fixed-fee projects before month-end closing, dedicated time-and-project tracking tied to accounting is usually the most accurate route.
If your agency requires robust multi-entity tracking, complex revenue recognition, or advanced general ledger controls, you need heavyweight project accounting.
If you run a lean creative shop and don't need heavy corporate accounting, streamlined options can do the job.
To help narrow down the ideal fit, tell me:
For an agency with **client retainers, project work, and project expenses**, the best tool depends on whether you need **true agency profitability management** or mainly **accounting + basic job costing**. The key metric you want is not just “revenue by client.” You want: **Client → Retainer/project → Revenue →…
For an agency with client retainers, project work, and project expenses, the best tool depends on whether you need true agency profitability management or mainly accounting + basic job costing.
The key metric you want is not just “revenue by client.” You want:
Client → Retainer/project → Revenue → Internal labor cost → Contractor costs → Expenses → Gross profit → Margin
Many accounting systems handle revenue and expenses well, but the difficult part is assigning the real cost of your team’s time to each client/project.
| Tool stack | Best for | Strengths | Weaknesses |
|---|---|---|---|
| QuickBooks Online + Harvest | Most small/mid-size agencies | Accounting + time tracking + project margins | Two systems to maintain |
| Xero + Xero Projects | Accounting-first agencies | Project costing, expenses, profitability reporting | Less agency-specific operations depth |
| Productive + QuickBooks/Xero | Growing agencies | Excellent client/project margin visibility, retainers, utilization | More operational setup |
| Kantata | Larger professional services firms | Enterprise project accounting, forecasting, resource planning | Expensive and complex |
| FreshBooks | Small creative agencies | Easy invoicing, retainers, client billing | Limited deeper profitability analysis |
Teamwork Kantata## My shortlist
This is the setup I’d choose for many agencies with roughly 5–30 people.
QuickBooks handles:
invoices
recurring retainers
vendor bills
expenses
accounting/tax reporting
Harvest handles:
employee time
project budgets
utilization
billable vs. non-billable hours
profitability by client/project/task
Harvest is particularly useful because it connects tracked hours to cost rates and margins.
Good questions this answers:
If your main concern is knowing whether clients and projects make money, Productive is a stronger agency operations platform.
It is designed around:
This is usually a better fit once you have multiple teams, many concurrent projects, or regular margin reviews.
If you want fewer moving parts, Xero is worth considering. Xero Projects can associate time, bills, and expenses with projects and provide project profitability views.
I’d lean toward Xero if:
For larger agencies with resource planning needs, Kantata provides deeper project accounting, forecasting, and margin management. It is aimed more at professional services organizations than small creative shops.
For most agencies, I would avoid trying to make the accounting system alone answer profitability questions. The accounting system should be the financial source of truth; the project system should capture the delivery economics.
If you share:
I can narrow this to the best-fit stack.
For an agency balancing recurring client retainers and fluid project expenses, tracking true profitability requires looking at **operational visibility** (time tracking, budget burn, retainer usage) alongside the **general ledger** (invoicing, vendor bills,…
For an agency balancing recurring client retainers and fluid project expenses, tracking true profitability requires looking at operational visibility (time tracking, budget burn, retainer usage) alongside the general ledger (invoicing, vendor bills, expenses).
Depending on your agency’s size and whether you want an all-in-one platform or a dedicated accounting core paired with a PSA (Professional Services Automation) tool, several options excel at client and project profitability:
To help narrow down the best fit, let me know:
For an agency with **monthly retainers + one-off projects + client-specific expenses**, I’d prioritize tools that can tie **revenue, internal labor, contractor costs, expenses, and time** to the same client/project. Otherwise, a client can look highly profitable simply because the accounting system sees the $15k…
For an agency with monthly retainers + one-off projects + client-specific expenses, I’d prioritize tools that can tie revenue, internal labor, contractor costs, expenses, and time to the same client/project. Otherwise, a client can look highly profitable simply because the accounting system sees the $15k invoice but not the 80 hours of delivery work.
| Tool / stack | Client profitability | Project profitability | Retainers | Expenses | Best for |
|---|---|---|---|---|---|
| Productive + QuickBooks/Xero | ⭐⭐⭐⭐⭐ | ⭐⭐⭐⭐⭐ | ⭐⭐⭐⭐⭐ | ⭐⭐⭐⭐ | Growing/midsize agencies |
| QuickBooks Online + Harvest | ⭐⭐⭐⭐ | ⭐⭐⭐⭐ | ⭐⭐⭐⭐ | ⭐⭐⭐⭐⭐ | Most small–midsize U.S. agencies |
| Xero + Xero Projects | ⭐⭐⭐⭐ | ⭐⭐⭐⭐⭐ | ⭐⭐⭐⭐ | ⭐⭐⭐⭐⭐ | Accounting + project costing |
| FreshBooks | ⭐⭐⭐⭐ | ⭐⭐⭐⭐⭐ | ⭐⭐⭐⭐ | ⭐⭐⭐⭐ | Smaller/simple agencies |
| Scoro / Kantata | ⭐⭐⭐⭐⭐ | ⭐⭐⭐⭐⭐ | ⭐⭐⭐⭐⭐ | ⭐⭐⭐⭐⭐ | Larger, resource-heavy agencies |
If the question you're really trying to answer is “Which clients and projects actually make us money?”, this is my top choice.
Productive is designed around agency operations: projects, retainers, time, budgets, resource costs, utilization and margins. Your accounting system remains the financial source of truth, while Productive provides the operational profitability layer.
I'd choose this if you have 10+ people, lots of concurrent projects, or significant retainer work.
Intuit QuickBooks Online is a strong accounting backbone, and its Projects feature can assign income and costs to specific projects and calculate profitability.
Harvest adds much better time/project economics. Its profitability reporting can show margin by client, project, task, or team.
This is particularly good for an agency that wants:
Xero is particularly compelling if you want accounting and project costing to live together.
Xero Projects lets you assign time, bills and expenses to projects and provides profitability reporting showing revenue, costs and margins.
I would lean toward Xero if you have international clients/multiple currencies or simply prefer Xero's accounting workflow.
FreshBooks is worth a serious look if you're a smaller creative, marketing, design, consulting, or similar agency.
It's particularly good when you want invoicing + recurring billing + time tracking + expenses + project profitability without building a complicated stack.
One important point: don't define project profitability as revenue minus vendor expenses alone. Your reporting should allocate an internal cost rate to employee time. For example:
$15,000 retainer − $6,000 internal labor − $2,000 freelancers − $1,000 client/project expenses = $6,000 contribution / 40% margin That's what exposes the “big client that's secretly unprofitable” problem.
If you tell me agency headcount, approximate number of retainer clients, monthly revenue, and whether you use contractors, I can narrow this down to the best 2 options and the exact workflow I'd use for client/project P&Ls.
This is particularly good for an agency that wants:
For an agency managing retainers and project-specific expenses, the best accounting tools are **QuickBooks Online (Plus/Advanced)**, **FreshBooks** , and **Zoho Books** , all of which feature built-in project profitability and job-costing…
For an agency managing retainers and project-specific expenses, the best accounting tools are QuickBooks Online (Plus/Advanced), FreshBooks , and Zoho Books , all of which feature built-in project profitability and job-costing tools.
Top Accounting Tools for Agency Profitability
| Tool | Best For | Key Profitability Feature | Starting Price (Approx.) |
|---|---|---|---|
| QuickBooks Online | Comprehensive job-costing & accountant familiarity | Tracks labor, expenses, and income per project in real-time | $115/mo (Plus tier required for projects) |
| FreshBooks | Service-based agencies prioritizing time-tracking | Retainer tracking with automated advance payment application & profit margins | Varies by user count / plans |
| Zoho Books | Value-driven and integrated business ecosystems | Deep project management and expense tracking bundled affordably | Tiered / Free options available |
Detailed Breakdown
If you'd like, tell me:
I can help narrow down the ideal software stack for your workflow.
