Because the relationship between CPAs and their clients is so close, it’s especially important that the right clients are able to find you. Our range covers everything from assisting the DIY bookkeeper to handling daily transactions within your QuickBooks accounting file – right from campaign costing to analyzing advertising ROI. Partnering with financial experts like Fusion CPA can provide the guidance and solutions needed to navigate these challenges and unlock your agency’s full potential.

A marketing agency is a creative company and there are some aspects of marketing agency accounting that you should be aware of. Accounting is required in all areas of a marketing agency – advertising, branding, and creating financial statements. The obvious solution is to either use professional accounting software to handle all the financials of the marketing agency or hand over the entire process and paperwork to an accountant. To connect your accounts, follow the instructions provided by your accounting software. This typically involves entering login information for your financial accounts and allowing the software to access your financial data. Choosing the right method for your marketing agency depends on several factors, such as the size and complexity of your business and your revenue recognition model.

How to Handle Accounts Receivable and Accounts Payable in Your Agency

As a lesser-known competitor, FreshBooks offers fewer third-party integrations than QuickBooks does, but it does offer all the integrations you’ll need to run your agency. Even if you bill on a fixed-fee basis, you still need to ensure that you recover the underlying labor cost. Otherwise you might be doing too much work for too little pay and not realize it. The simplest way to implement an effective billing process is to use invoices. Smaller agencies may not need to use all of these best practices, but keep them in mind as your agency grows.

However, the cash method doesn’t provide the full picture of your agency’s finances. It often fails to match revenues with the period in which they were earned and expenses with the period in which they were incurred. A large receivables balance could indicate trouble collecting payments from clients, so monitoring receivables in your accounting system will help prevent cash flow issues.

Best Practices for Keeping Your Financial Records Up-to-Date and Accurate

Your financial statements typically include a balance sheet, income statement, and cash flow statement. Your accounting software should be able to generate these statements accounting for marketing agency for you automatically. Your financial statements provide an overview of your business’s financial activity, including income, expenses, assets, and liabilities.

You’re simply categorizing transactions as money enters or leaves the bank account. If you start adding too many sub-accounts, your financial statements will be messy and hard to understand. Best practice is to stick with general accounts and build custom reports that slice and dice financial data as needed. By not tracking billable expenses your agency runs the risk of failing to be reimbursed for costs that should be paid by clients. In addition to enabling project accounting, invoices reveal the amount of cash that hasn’t yet been collected from the agency’s clients, thus improving cash flow.