Accountants for Performance Marketing Agencies.

First check the client contract, because many agreements require media rebates to be passed back to the client, in which case they were never your income. Where the agency is entitled to keep them, recognise them when they are earned under the scheme's terms, not when the cash arrives, and show them separately rather than netting them into media cost. Transparency here is commercial protection too; rebate disputes are one of the classic ways agency and client relationships end badly.

Model it in bands rather than a single number: contracted minimums and retainer elements as the floor, then performance fees at conservative, expected and strong cases built from trailing conversion data. Plan costs against the floor, so payroll and platform commitments are covered even in a weak month, and treat everything above it as upside. Revisit it monthly, because a performance book ages fast.

Enough to cover the gap between paying platforms and being paid, plus a runway floor. Work out your exposure, the media you fund in an average month multiplied by the days between your payment out and the client's payment in, then add three months of overheads as the minimum cash buffer on top. If growth means the exposure number is climbing faster than the buffer, fix the payment terms before you scale the spend.

Split the deal into its parts and recognise each on its own logic: the retainer evenly over the month it covers, CPA fees as the actions are delivered and measurable, and revenue share as the client's numbers confirm it, with an accrual where reporting lags. Blending it all into one line makes your monthly accounts swing for reasons nobody can explain. Make sure the contract states the measurement source and timing, because that is what the accounting recognises against.

When the decisions get more expensive than the fee: funding six figures of monthly media, pricing hybrid deals, choosing which channels and clients to scale, or preparing for investment or sale. For most agencies that point arrives somewhere past £750,000 of fee income, well before a full-time finance director makes sense. A fractional CFO brings the forecasting and pricing discipline a performance model demands for a few days a month, and if you want to explore it you can book a call straight into our calendar.