Overhead costs are an essential part of agency operations. They include all expenses that do not directly generate revenue but are necessary to keep the business running—such as salaries, office rent, software subscriptions, and internal marketing efforts.

Without proper tracking, overhead expenses can easily go unnoticed, impacting profitability and financial planning. In Allfred, you can categorize and monitor these costs efficiently, giving you a clear overview of operational spending and helping you make data-driven decisions.

This guide will walk you through:
✅ How to structure overhead tracking in Allfred using the client-brand system
✅ How to set up projects for different types of operational costs
✅ How to track internal expenses and review financial reports

By following these best practices, your agency will gain better financial visibility, improve cost management, and ensure that operational expenses are aligned with business goals.

To effectively track operational costs and overhead expenses, it is essential to create a structured system in Allfred. The client-brand structure in Allfred allows agencies to organize these costs efficiently.

A client represents the agency name, while each brand represents a specific type of expense. This ensures clear financial segmentation and enables easy filtering of costs.

📌 Example of simple agency structure:

Client = Agency Name

📌 Alternative structure for more detailed cost tracking:

For agencies that want even more granular cost tracking, an alternative approach is to create the type of expense as a separate client and define various costs under it as a brands.
​

Client = Operations

This setup ensures that agencies can analyze costs at different levels, either in broader categories (Agency-level) or in more detailed segments (Operations-level).

With this setup, agencies can filter financial data by brand or client, allowing them to analyze costs effectively. By tracking expenses within structured categories, agencies can use financial reports to monitor overall business health, assess profitability, and make data-driven decisions.

Key benefits:
✅ Easy filtering of financial metrics for different cost categories
✅ Better visibility into monthly and yearly cost trends
✅ Clear reporting on agency overhead costs to optimize budgets

Just like client-based expenses, overheads and internal costs also require a project to track them properly. When creating an overhead project, assign it to the appropriate brand based on its category.

✅ Select the ‘non-billable’ option:
When creating a new internal project in Allfred, check the "non-billable" option. This indicates that expenses won't be covered by outgoing invoice.

Use tags in project categories to help filter and differentiate types of internal non-billable projects. Recommended categories:

1) Fixed price

For overhead projects, fixed pricing is useful when you want to define a specific budget for internal costs and see the expected costs.

📌 Example:

2) Fixed price project without budget

If the project consists of just one cost category, you can create a fixed price project without a budget and work solely with a not-budgeted item (pre-created in categories like work, expenses, media). In this scenario, you won't see the expected costs.

3) Time and materials

If you don’t need to predefine expected costs, you can create a time and materials project. You can structure the project by creating new budget items through the New budget item button.

📌 Example of budget items for Operations project:

Most agencies track financial results on a monthly basis to monitor cash flow and react to unexpected changes. In general, there are two different approaches:

1) Monthly or quarterly projects

Recommended when the client-brand structure is not very detailed and projects require multiple budget items to structure the expenses.

📌 Example:

Client: Agency name - Internal costs

Brand: Office and Operations
​Project: Operations January
​Budget items:

Workflow:

2) Yearly projects

More suited for agencies with a detailed client-brand structure.

📌 Example:

Both approaches work for fixed price projects (expected cost defined) and time and materials projects (structured tracking via New budget item).

Since these projects focus on cost tracking, rate cards are not always relevant.

However, for internal projects where hours will be tracked, refer to the detailed guide here: How to create internal project for agency activities?

📌 Example:
For internal marketing, tracking time may be necessary. You can apply internal hourly rates to measure time investment

Internal expenses are logged the same way as client expenses:

1️⃣ Click “+ New” → Expenses
2️⃣ Select expense type (Invoice, card payment, receipt, contract, etc.) and Contracotr
3️⃣ Upload the invoice → Allfred will automatically extract key details using OCR (always double-check the extracted data).
4️⃣ Assign the expense to the correct project and budget item.

📌 Approval process:
If another person needs to verify the expense, leave "Approved" unchecked, select the responsible person and click Request item approval.

📌 Expense accounts:
Each expense can be assigned to an expense account classification for bookkeeping. These can be used in accounting exports or financial reports via:
​Expenses → Export → Expenses export (XLS file for pivot tables and analysis). Expense account is visible only for roles CFO and Admin.