Track every cost you pay to vendors and subcontractors alongside what you charge your clients. See your actual markup and margin on pass-through expenses.
List each cost item you pay to a vendor and then pass through to the client. Include things like stock photography, printing, software licences, subcontractor fees, hosting, and ad spend. Enter what you pay and what the client pays. The markup percentage is calculated automatically.
Your total pass-through costs and the margin you are making on them.
Review your pass-through margins and decide where adjustments are needed. Common markups for agencies: 10% to 20% on print and production, 15% to 25% on subcontractor fees, and 0% to 10% on ad spend (some agencies pass ad spend at cost).