The marketing and advertising industry is one of the fastest-growing sectors in the world. But with this growth comes a new set of challenges — especially when it comes to financial reporting.
Accounting for ad agencies doesn’t have to be complicated. You can simplify your advertising agency’s financial management and accounting with the strategic use of financial reports.
Types of Financial Statements for Marketing Companies
There are four key financial reports that advertising and marketing agencies need to be aware of:
Profit Analysis Report
As the name suggests, this report provides insights as to how profitable your advertising agency truly is. A profit analysis report offers a comparison of estimated costs and actual costs, along with billable amounts and actual invoices. The report can be as specific as you want it to be with the addition of filters to show the names of clients, a range of dates spent working on projects and more.
Staff Utilization Report
Keep track of available staff hours, hours already worked and billable hours organized by each staff member and role at your agency with a staff utilization report. This report lays out the details of staff hours within a given date range, billable or otherwise.
An efficiency report is essential when it comes to understanding the efficiency of your marketing company’s active staff members. This report includes the number of jobs worked on by each staff member, along with a breakdown of their billable and non-billable hours worked in a given time. You can also weigh the value of the payroll cost of an individual against their billable hours.
WIP, or Work in Progress Report
A work in progress report also offers valuable insights about the day to day operations of your agency. A WIP report will include job-level details along with financial data, such as a breakdown of which values are actual or estimated and which are invoiced or un-billed.
Accounting Tips for Your Advertising Agency
If you want your advertising agency to continue to grow in the coming years, proper accounting is essential. Keeping your financial reports up-to-date is one tip. Here are a few more:
- Keep track of all of your cash flow and expenses. That includes receipts, contracts, deposit slips and more.
- Set time aside for upkeep. If you’re handling any aspects of your accounting in-house, you need to schedule a designated time to do so on a weekly or monthly basis.
Accounting can be complex, especially as your business grows and you have more staff members and clients to keep track of. When in doubt, you can’t go wrong by outsourcing accounting and financial management to an experienced firm.
Are You in Need of Accounting Services? Marshall Jones Can Help!
Our team of Certified Public Accountants and Advisors has been serving businesses and individuals in Atlanta for over three decades. Let us handle the financial aspect of your business so you can focus your attention on creative advertising! Contact us today for expert assistance in managing your advertising agency.