What accounting software is best for an email marketing agency?

Key takeaways

• Xero is often the top choice for email marketing agencies due to its strong automation, project tracking, and wide range of integrations with platforms like Mailchimp and Klaviyo.
• Your software must handle recurring revenue smoothly. Look for automated invoicing for retainers and the ability to track billable hours against fixed project fees.
• Project and client profitability tracking is non-negotiable. You need to see if each email campaign or client is actually making money after accounting for your team's time and software costs.
• Integration with your tech stack saves hours. Direct links to your payment gateway, email platform, and bank feed eliminate manual data entry and errors.
• Scalability matters for growth. Choose software that can handle more clients, more complex reporting, and multi-user access as your agency expands.

Choosing the best accounting software for your email marketing agency is a commercial decision, not just an admin one. The right tool does the work for you. It turns financial chaos into clear profit margins on every campaign and client.

Many email marketing agencies start with spreadsheets or basic software. This works until you have multiple retainers, freelancers, and need to know which client is actually profitable. The best accounting software for an email marketing agency solves these specific problems.

It automates your billing, tracks time against projects, and shows you your real agency health. This guide breaks down what to look for and compares the top options for UK-based agencies. We focus on the features that matter for your business model.

What makes accounting software 'best' for an email marketing agency?

The best accounting software for an email marketing agency automates repetitive financial tasks and provides clear insight into client and project profitability. It should handle recurring invoices for retainers, track billable hours against fixed fees, and integrate with your email marketing platforms and payment tools. This saves you time and gives you the data to make smarter pricing decisions.

For an email marketing agency, 'best' means software built for a service business with recurring revenue. You're not selling physical products. You're selling strategy, creative work, and management time.

Your software needs to reflect that. It should help you answer key questions. Is your £3,000 monthly retainer for a client profitable after paying your strategist and designer? What's the gross margin on that big campaign launch?

Good small business bookkeeping tools for other industries might lack these specific features. The right cloud accounting for agencies focuses on projects, people, and profit.

Why do most email marketing agencies get their software choice wrong initially?

Most email marketing agencies initially choose accounting software that's too basic or built for a different business type. They pick a cheap, generic option that can't handle retainers, project tracking, or client profitability analysis. This leads to manual workarounds, inaccurate profit data, and wasted time that could be spent on client work.

The common mistake is treating accounting software as just a bill-paying and invoice-sending tool. For an agency, it's your commercial dashboard. A simple tool might record that you billed a client £5,000.

But it won't show that the project used 120 hours of your team's time, burning through your margin. Without project tracking, you're flying blind on profitability.

Another error is not planning for integrations. As you grow, you'll use tools like Stripe for payments, Deel for freelancer payments, and platforms like HubSpot for CRM. If your accounting software doesn't connect to them, you create a manual data entry nightmare.

This is a frequent pain point we see with new agency clients. Specialist accountants for email marketing agencies often help them migrate from a basic system to one that actually supports their business model.

What are the essential features to look for in accounting software?

Look for software that automates recurring invoicing for retainers, tracks time and expenses by project or client, and provides clear profitability reports. Essential features include bank feed automation, integration with payment gateways like Stripe, and the ability to handle both fixed-price projects and hourly billing. Multi-user access with role-based permissions is also key as you grow.

Let's break down the non-negotiable features for an email marketing agency.

Automated Recurring Invoices: You likely work on monthly retainers. Your software should automatically generate and send these invoices on a schedule. This improves cash flow and saves you hours each month.

Project/Client Tracking: This is the core of agency profitability. You need to assign income, time costs, and direct expenses (like ad spend or software licenses) to specific clients or campaigns. This shows you your gross margin per client.

Time Tracking Integration: Whether you use Toggl, Harvest, or Clockify, your accounting software should connect to it. This automatically pulls billable hours into your projects, making invoicing accurate and easy.

Bank Feed & Reconciliation: A live bank feed imports transactions automatically. You then match them to invoices or bills. This is the foundation of accurate, up-to-date bookkeeping and is standard in modern cloud accounting for agencies.

Payment Gateway Integration: Links to Stripe, GoCardless, or PayPal let clients pay invoices online with a click. This dramatically speeds up payment and reduces your debtor days (the time you wait to get paid).

How do Xero, QuickBooks, and FreeAgent compare for agencies?

Xero is generally the strongest for email marketing agencies due to its superior automation, extensive app marketplace, and robust project tracking. QuickBooks Online is a capable alternative with strong core accounting. FreeAgent is excellent for very small agencies or freelancers due to its simplicity, but can lack scalability for growing teams. The best choice depends on your size and complexity.

Here’s a detailed comparison based on working with dozens of agency clients.

Xero: Often our top recommendation. Its 'Projects' feature is built for tracking job profitability. It has the widest range of integrations (over 1,000 apps), including direct links to email platforms like Mailchimp via tools like Zapier. Its automated invoice reminders and batch payment processing are huge time-savers. Pricing scales logically from small to larger firms.

QuickBooks Online: Has a very user-friendly interface and strong reporting. Its project tracking is good, though some find it less intuitive than Xero's. It integrates well with many payment systems. It's a solid, all-rounder choice for accounting software UK agencies can rely on.

FreeAgent: Brilliant for solopreneurs or micro-agencies (1-3 people). It's incredibly intuitive and bundles time tracking and invoicing beautifully. However, its project tracking is more basic, and it can become limiting as you add team members and need more complex reporting or user permissions.

According to a 2024 market share analysis, Xero and QuickBooks dominate the cloud accounting space for small service businesses, reflecting their depth of features.

What specific integrations should an email marketing agency prioritise?

Prioritise integrations that connect your accounting software to your email marketing platforms (like Klaviyo or ActiveCampaign), payment processors (Stripe/GoCardless), and time-tracking tools. A connection to your bank for automated feeds is essential. Integrations with CRM platforms like HubSpot or client portals can also streamline your workflow and reduce manual data entry.

Integrations turn your accounting software from a standalone tool into the financial hub of your operations. They make data flow automatically.

Email Marketing Platforms: While not always a direct integration, you can use Zapier or Make to connect tools like Klaviyo or MailerLite. For example, you can automatically create a client invoice when a new campaign is marked 'complete' in your project management tool.

Payment Gateways (Stripe, GoCardless): This is a direct, must-have integration. It allows for online card and direct debit payments, automatic reconciliation of payments to invoices, and stored customer details for recurring billing.

Time Tracking (Toggl, Harvest): This feeds billable hours directly into your projects in Xero or QuickBooks. It ensures every minute of client work is captured and can be billed, either directly or used to measure project profitability.

Expense Management (Pleo, Soldo): These tools manage company cards and employee spending. They sync transactions directly to your accounting software, categorised and ready for approval, saving huge amounts of receipt-chasing time.

How can accounting software improve profit margins on client work?

Accounting software improves profit margins by giving you accurate data on the true cost of delivering client work. By tracking all time and expenses against a specific client or project, you can see your actual gross margin. This allows you to identify unprofitable clients, adjust your pricing, control scope creep, and make informed decisions about which services to offer or promote.

Let's say you have a client on a £4,000 monthly retainer. Your software shows you've assigned 50 hours of team time to them this month. If your blended team cost is £50 per hour, your direct cost is £2,500.

Your gross margin is £1,500, or 37.5%. That's valuable insight. If another client on the same retainer uses 80 hours, they're much less profitable, or even losing you money.

This data lets you have informed conversations. You can re-scope the work, adjust the retainer, or improve your processes. Without this tracking, you might just feel busy while your bank balance doesn't grow.

Good software also helps you bill for everything. It tracks reimbursable expenses (like ad spend you front for a client) and ensures they are invoiced promptly, protecting your cash flow.

What are the implementation steps for switching to new software?

Start by cleaning up your current finances, then choose a quiet period to migrate. Export a list of contacts, outstanding invoices, and bank transactions. Set up your chart of accounts for agency-specific categories, configure your integrations, and run the new system in parallel with the old for one month to catch errors. Consider professional help to ensure a smooth transition.

Switching accounting systems can feel daunting, but a methodical approach makes it manageable.

Step 1: Clean Up Your Current Data. Reconcile all bank accounts up to the date you plan to switch. Chase any outstanding invoices and make sure all bills are entered. A clean starting point is crucial.

Step 2: Plan Your Chart of Accounts. This is the list of categories for your income and expenses. Set it up for an agency. Have income accounts for Retainers, Project Fees, and Hourly Work. Have cost accounts for Team Salaries, Freelancers, Software Subscriptions, and Client Ad Spend.

Step 3: Migrate Key Data. You typically import: Contact details for all clients and suppliers. A list of outstanding invoices (what you're owed) and bills (what you owe). Your opening bank balances.

Step 4: Configure Integrations. Connect your bank feed, payment gateway, and time-tracking tool. Set up automated invoice reminders and recurring invoice templates.

Step 5: Run in Parallel. For one month, do your bookkeeping in both the old and new systems. This helps you spot any missed transactions or configuration errors before you fully commit.

Many agencies find using a specialist who understands agency sector accounting invaluable during this process to set things up correctly from day one.

When should an email marketing agency consider professional bookkeeping help?

Consider professional help when you're spending more than 5-8 hours a month on bookkeeping, when tax deadlines cause stress, or when you lack clear financial reports to guide decisions. If you're switching software, scaling past 5 employees, or dealing with complex international clients, bringing in an expert ensures accuracy, saves you time, and provides strategic financial insight.

Your expertise is in email marketing, not tax law or double-entry bookkeeping. As your agency grows, the financial complexity grows too.

Signs it's time for help include: You're consistently late filing VAT returns. You aren't sure if your quarterly figures are accurate. You have no time to review profitability reports, even if your software generates them.

A good bookkeeper or accountant does more than compliance. They ensure your software is set up optimally, your integrations are working, and your data is clean. This gives you reliable numbers to base business decisions on.

They can also handle payroll, VAT schemes, and corporation tax, freeing you to focus on clients and growth. The cost is often offset by the time you reclaim and the financial efficiencies they identify.

Choosing the best accounting software for your email marketing agency is a critical step. But the software is just a tool. Its real value comes from being set up correctly and used to generate actionable insights. The right system gives you control, clarity, and confidence in your agency's financial future.

For a hands-on framework to build your financial plan alongside your new software, our financial planning template for agencies can help you connect the dots between your numbers and your strategy.