Should a PR agency hire an accountant or use software?

Key takeaways

• Software handles transactions, an accountant handles strategy. The best small business accounting software automates bookkeeping, but a PR agency accountant interprets the numbers to improve your profit and cash flow.
• Compliance is the minimum, growth is the goal. HMRC compliant bookkeeping keeps you legal. An accountant helps you use your financial data to win better retainers, manage team costs, and scale profitably.
• The right choice changes as you grow. A solo PR consultant might start with software. An agency with a team and multiple retainers will quickly need an accountant's commercial insight to avoid costly mistakes.
• Consider outsourced finance pros cons. A full-time hire is a major cost. Outsourced or part-time finance expertise gives you strategic support without the overhead of a full salary.

What's the real difference between a PR agency accountant and accounting software?

A PR agency accountant provides strategic commercial advice. Accounting software is a tool for recording transactions. Think of it like this: software tells you what happened yesterday with your money. An accountant helps you decide what to do with your money tomorrow to grow your agency.

The best small business accounting software, like Xero or QuickBooks, is brilliant for automation. It connects to your bank, creates invoices, and tracks what you owe and who owes you. It keeps your records tidy for HMRC.

A specialist PR agency accountant does more. They look at your numbers and tell you the story behind them. They might say, "Your media outreach retainer has a 70% gross margin, but your social media management is only 40%. Let's talk about pricing." They turn data into decisions.

This is the core of the PR agency accountant vs accounting software debate. One is a reactive tool. The other is a proactive partner in your business growth.

When does a PR agency definitely need an accountant, not just software?

You need a PR agency accountant when your financial questions become strategic, not just administrative. If you're asking "how can I be more profitable?" not just "how do I file my VAT return?", it's time. This typically happens when you hire your first employee, land a sizable retainer, or plan to grow beyond a solo operation.

Software can't give you commercial advice. It can't warn you that your biggest client is actually your least profitable when you factor in team time. It can't suggest a better payment structure for your retainers to improve cash flow.

You also need an accountant before making big decisions. Are you considering hiring? Taking on office space? Buying out a partner? These choices have major tax and cash implications. Getting HMRC compliant bookkeeping is one thing. Navigating a business sale or complex payroll is another.

In our work with PR agencies, we see the shift happen around the £200k-£300k revenue mark. At this point, the financial complexity and the cost of getting it wrong outweigh the fee of getting expert help.

Can I just use the best small business accounting software and be fine?

Yes, but only if you are a solo PR consultant with very simple finances. If you are a true one-person band, with a handful of project clients and no employees, good software might be enough. Your goal is basic compliance and knowing how much money is in the bank.

The moment you add complexity, software alone becomes risky. Complexity for a PR agency includes: hiring a junior account executive, putting someone on payroll, working on monthly retainers (not one-off projects), charging clients for media spend or expenses, or wanting to understand your agency's profitability.

Software gives you data. It doesn't give you insight. You might see you made £10,000 profit last month. But you won't easily see if that profit came from one wildly profitable client or was spread thinly across five that are eating your team's time.

For true HMRC compliant bookkeeping, software needs to be set up correctly from the start. Many agency owners mis-categorise expenses or mess up VAT codes. This creates a huge cleanup job later, often costing more in accountant's fees to fix than it would have cost to get help upfront.

What are the outsourced finance pros cons for a PR agency?

The main pro of outsourced finance is getting expert, strategic help without a full-time salary cost. You pay for what you need, when you need it. The main con is it's not someone sitting in your office every day, though with cloud accounting, that's rarely necessary anymore.

Let's break down the outsourced finance pros cons. The pros are significant for a growing PR firm. You get access to senior-level financial expertise that you couldn't afford to hire full-time. This expertise is specifically in agency economics, not just general bookkeeping.

They act as a commercial partner. They can review client contracts, advise on pricing models for a new service, and help you forecast cash flow for the next quarter. They become an extension of your leadership team.

The cons are mostly about perception, not reality. Some founders worry about lack of control or communication delays. In practice, a good outsourced provider uses shared software dashboards and has regular check-ins. You see the numbers in real-time, just like you would with an employee.

For most PR agencies, the pros of outsourced finance – cost, expertise, flexibility – far outweigh the cons. It's the most scalable way to get the financial leadership you need. Specialist accountants for PR agencies are built for this model.

How do I make my bookkeeping HMRC compliant?

HMRC compliant bookkeeping means keeping clear, accurate, and complete records of all your business income and expenses. You must be able to show this for at least 5 years after the relevant tax year. For a PR agency, this includes retainers, project fees, client expenses, and all business costs.

Using the best small business accounting software is the easiest way to start. It automatically imports bank transactions and creates a digital audit trail. You must ensure every transaction is correctly categorised and has supporting documents, like invoices and receipts.

Key areas PR agencies often get wrong include: mixing personal and business expenses on one card, not properly recording client retainer payments, and mishandling VAT on different types of income (like whether a service is standard or zero-rated).

Compliance is the absolute baseline. The real goal is to have your books so clean and organised that they are useful for you, not just for HMRC. Clean books let you run accurate profit reports per client or service line, which is where the real business value lies.

What does the PR agency accountant vs accounting software decision look like at different stages?

At each stage of growth, the balance between software and accountant shifts. Early on, you do everything yourself with software. As you grow, the accountant's strategic role becomes essential, while software handles the day-to-day recording.

Stage 1: Solo PR Consultant (Revenue: £0-£80k)
You can likely manage with software alone. Your focus is on winning clients and delivering work. Use software to track invoices, expenses, and prepare for your annual Self Assessment tax return. The cost of an accountant might feel high relative to your income.

Stage 2: Small PR Agency (Revenue: £80k-£300k)
This is the tipping point in the PR agency accountant vs accounting software debate. You now have a team, payroll, and more complex client agreements. You need help with VAT, payroll taxes, and understanding your gross margin (the money left after paying your team). An accountant becomes a cost-saving necessity to avoid penalties and poor pricing.

Stage 3: Growing PR Firm (Revenue: £300k+)
You need both, working together. The software is your operational engine, run by you or a bookkeeper. Your accountant is your commercial co-pilot. They provide monthly management accounts, cash flow forecasts, and strategic advice on pricing, profitability, and growth funding. The fee is an investment in informed decision-making.

What hidden costs should I watch out for with DIY accounting?

The biggest hidden cost of DIY accounting with just software is opportunity cost. The hours you spend wrestling with VAT returns or reconciling accounts are hours not spent on client work, business development, or strategy. For a PR agency founder, your time is your most valuable asset.

Financial mistakes are another massive hidden cost. Underpaying VAT leads to interest and penalties from HMRC. Mis-pricing a large retainer because you don't understand your true cost of delivery can cost you thousands in lost profit over a year. Software won't stop you from making these commercial errors.

There's also the cost of stress and uncertainty. Not knowing your true financial position creates anxiety. It can lead to reactive, fear-based decisions instead of confident, strategic ones. An accountant provides clarity and confidence, which is invaluable.

Finally, consider the cost of poor cash flow management. Software might show your bank balance, but it won't proactively warn you of a cash crunch coming in 60 days because two big retainers are ending. An accountant will model this out and help you take action early.

Can I start with software and add an accountant later?

Yes, absolutely. This is a very common and sensible path. Many PR agency founders start by using software themselves to keep costs low. The key is to set up your software correctly from day one, so the transition to working with an accountant is smooth, not a painful data cleanup project.

Choose one of the best small business accounting software platforms that is widely used by accountants, like Xero. This ensures easy handover later. Be meticulous about categorising transactions and keeping digital copies of all receipts.

The sign it's time to add an accountant is when you start to feel out of your depth, or when financial admin is taking more than a few hours a month. Another sign is when you have questions about your numbers that the software can't answer, like "Am I charging enough?" or "Can I afford to hire?"

When you do bring in an accountant, they will review your existing setup. A good specialist will work with your software, not make you start over. They'll build on the foundation you've created to add the layer of analysis and strategy you now need. For a tailored approach, exploring specialist agency insights can help frame what to look for.

What should I actually look for in a PR agency accountant?

Look for an accountant who understands the business model of a PR agency, not just general accounting. They should speak your language – retainers, scope creep, media rates, team utilisation. Their experience with other creative or service-based businesses is crucial.

They should offer more than just tax and compliance. Ask if they provide monthly management accounts. These are simplified profit and loss reports that show your agency's performance, often with key metrics like gross margin by client or service line. This is the strategic output you're paying for.

Check their technology approach. Do they use and recommend modern cloud accounting software? Can they show you how they'll give you visibility into your numbers through a dashboard? The days of getting a paper report once a year are gone.

Finally, consider the fit. You'll be discussing sensitive commercial information. You need to trust them and feel they are genuinely invested in your agency's success. They should feel like a part of your team. Many find that starting a conversation with a specialist firm is the best way to gauge this fit.

Getting your finances right is a major competitive advantage. The choice between a PR agency accountant and accounting software isn't really an either/or. The winning combination for most growing agencies is powerful software for efficiency, paired with a specialist accountant for commercial intelligence. This frees you up to do what you do best: building brilliant campaigns and growing your agency.