If you’d like to watch our talk on this subject, check out our full session with Scooter on our YouTube channel here.
If you’ve ever looked at your agency’s financials and thought, “I know these numbers matter, but I’m not sure what they’re really telling me,” you’re not alone. Many agency owners come from creative, strategic, or client-service backgrounds rather than finance. Still, understanding financial health is critical to running a sustainable, profitable business.
The good news is that you do not need to track dozens of reports to get clarity. There are a handful of core metrics that, when reviewed consistently, can tell you a lot about how your agency is performing today and where it is headed next. Together, they provide a clear snapshot of profitability, liquidity, operational efficiency, and risk.
The 3–5 Metrics Every Agency Should Track Monthly
1. Profit: Historical and Projected
Profit is not just about what already happened. It is also about what’s coming next.
Looking at historical profit helps you understand how your agency has performed over the last month, quarter, or year. Pairing that with projected profit is what allows you to make smarter decisions ahead of time.
Projected profit helps answer questions like:
Tracking both views together allows you to spot trends early and make adjustments before
Tracking both views together allows you to spot trends early and make adjustments before problems show up in your bank account.
2. Receivables and Payables and Cash
Cash is the lifeblood of any agency, and it deserves constant attention.
Your cash balance tells you how much money you have available today, while receivables and payables show what is coming in and what is going out.
If you are not regularly reviewing receivables and actively following up on overdue invoices, you are setting yourself up for unpleasant surprises. Late payments can quietly create major cash-flow stress, even in agencies that appear profitable on paper.
Payables matter just as much. Knowing what you owe and when allows you to plan responsibly, maintain strong vendor relationships, and avoid last-minute scrambles.
3. Client or Project Profitability
Not all revenue is good revenue.
Tracking client or project profitability helps you understand which work is actually contributing to your bottom line and which work may be draining resources without delivering returns.
Agencies that review client or project margins on a regular basis gain clarity on:
4. Employee Utilization
Employee utilization is one of the most commonly overlooked and most important metrics for agencies.
At its core, utilization measures how much of an employee’s time is spent on client-billable work versus total available working time. Since employees are the primary product agencies deliver, understanding how effectively that time is being used is critical.
Utilization helps answer important questions:
What’s a Reasonable Utilization Target?
There are many ways to calculate utilization, and no single number works for every agency or role. However, a simple framework provides a useful starting point.
A standard full-time employee works roughly 2,080 hours per year, calculated as 52 weeks times 40 hours. If you expect a fully client-facing employee to deliver 1,800 billable hours annually, that equates to a utilization rate of approximately 86 to 87 percent.
Some agencies adjust this calculation by removing holidays, vacation, or training time, which lowers the denominator and changes the percentage. The exact math matters less than consistency and clarity.
As a general guideline, many agencies aim for 80 percent or higher utilization for fully client-facing roles, with adjustments based on seniority, responsibilities, and team structure.
How Often Should Agencies Review These Metrics?
At a minimum, agencies should review these metrics monthly.
However, if the systems and processes are in place, reviewing certain metrics weekly can be extremely valuable, especially cash and receivables. Frequent review allows agency owners to address issues early rather than reacting after financial stress has already set in.
Why Regular Financial Review Matters, Even If You’re Not a Finance Expert
Consistently reviewing financial metrics is one of the most important management habits an agency owner can build. These reports reveal what is really happening beneath the surface of client work, creative output, and growth.
While accounting software can generate the data, translating that information into clear, actionable insights often requires experience. That is why many agency owners benefit from financial expertise that explains the numbers in plain language and helps connect them to strategic decisions.
Regularly monitoring profits, cash, receivables, client margins, and utilization is foundational to running a healthy agency. These metrics work together to tell a complete story, not just about where your agency has been, but where it is going.
If you want help building a simple, reliable way to track and interpret these numbers, Heath Advisory works with agency owners to bring clarity, structure, and confidence to their financial decision-making. Reach out to learn more about how a fractional CFO approach can support your agency’s growth.
