A marketing agency should bill retainers and project work on separate, clearly labeled lines. It should show media spend and fees apart. The core documents are the invoice, quote, purchase order and account statement.
Documents agencies use
- Quote. Send it before a campaign or project. List each deliverable with a price. Add a validity date and what is out of scope, such as extra revision rounds.
- Invoice. Send it monthly for retainers and at milestones for projects. Add the campaign name in the line description.
- Purchase order. Issue it to freelancers, photographers and print vendors. It fixes scope and price before the work starts.
- Account statement. Send it to clients with many campaigns. One page shows every charge, payment and the balance.
How billing usually works
| Item | Typical approach |
|---|---|
| Retainer | Fixed monthly fee for an agreed scope or hours |
| Project | Fixed fee, often split into stages |
| Media spend | Pass-through cost plus a fee or markup |
| Vendor costs | Cost plus markup, shown on its own line |
Markup needs consistency. Choose a rule, such as a percentage on vendor cost, and apply it to every client in the same way. The generators do not calculate markup, so work it out first with the markup calculator and enter the final price per line.
Retainers and projects often run side by side. Say in the contract which hours or deliverables the retainer covers. Work outside it goes on a quote.
Common invoicing mistakes
- Mixing pass-through media spend into the fee, so the client cannot see your margin or theirs.
- Letting scope grow with no quote for the extra work.
- Paying vendors without a purchase order and then disputing the amount.
- Billing media spend after the platform has already charged you.
- Skipping the client's PO number when their finance team requires one.
- Sending no reminder. See invoice follow-up.
Useful calculators and guides
- Markup calculator to price vendor costs.
- Margin calculator to check your profit on a project.
- Retainer calculator to set a monthly fee.
- Project invoice calculator to plan milestone amounts.
Guides: retainer agreements, purchase orders and customer statements.
Frequently asked questions
- How do agencies bill retainers and projects together?
- Use separate lines on one invoice, or separate invoices. Label each line with the campaign or service. This helps the client's finance team match each charge to a budget.
- How should I charge markup on ad spend?
- Agree the markup or management fee in the contract. Show media cost and the fee on separate lines so the client sees both. Clear lines build trust and reduce disputes.
- Should I bill media spend before or after it runs?
- Many agencies bill in advance, because the agency pays the platform or vendor first. Put this in the contract. Advance billing protects your cash flow on large campaigns.
- Why do I need purchase orders for freelancers and vendors?
- A purchase order records the agreed scope and price before work starts. When the vendor invoice arrives, you match it to the order and avoid paying more than agreed.
- How do I show a client what they owe across campaigns?
- Send an account statement. It lists charges and payments by date and shows the balance due. It works well at month end for clients with several open campaigns.