Bookkeeping For Marketing Agencies: Everything You Need To Know Bookkeeping Services Made For Entrepreneurs

Whether contractors or full-time employees staff your team, Decimal makes it easier to coordinate payroll every month and track the info for tax time. Get support with commissions, benefit deductions, and reimbursements with Decimal’s payroll support. See how much money is being invested into each campaign to pull reports and measure ROAS easily. Prove value to your clients and grow your presence, focusing on successful campaigns. Send invoices easily with all the details your clients want to see and get paid quickly.

Maximizing Revenue Sources: Effective Management for Marketing Agencies

If you use any third-party apps, such as timekeeping or payroll software, you should connect it to your accounting software. If you’re not sure whether an app connects to your accounting software, take some time to review the app’s documentation just in case. Integrations can simplify your agency’s accounting when the alternative is to manually import data into your accounting software. It provides comprehensive project accounting features, financial reporting, and integrations with other systems. Ideally, your selected timekeeping software integrates with your accounting system, since you need to allocate labor cost to bookkeeping for marketing agencies client projects in order to truly benefit from project-based accounting.

Use invoices to bill clients

However, marketing agencies still need the same core services that many other businesses do – and one such service is accurate and timely accounting and financial planning. Your accounting system should facilitate both the tracking of billable expenses and the invoicing of those expenses back to clients. Failing to bill back project expenses erodes project profitability and could create cash flow problems for your agency. Key financial metrics can provide valuable insights into your business’s financial health and performance. Some common metrics to track for marketing agencies include revenue, profit margins, customer acquisition cost (CAC), monthly recurring revenue (MRR), and lifetime income summary value of a customer (LTV). Keep track of all expenses, invoices, and receipts, as they can be used for tax purposes or audited by the bank when applying for loans.

Get help with your marketing agency’s accounting

The accrual method solves this problem by recognizing the billing as June revenue regardless of the month in which the agency collected payment for the billing. For example, you can’t record a revenue transaction without also posting an equally offsetting transaction to the bank account balance. Project A, on the other hand, is profitable but at risk of being delivered late and thus harming your client relationship.

How Employee Utilization Drives Profitability for Professional Service Firms

If revenues are lower than anticipated, https://www.bookstime.com/ you might need to consider cutting costs to avoid burning through cash reserves. Or if expenses are higher than anticipated, you can investigate why and either cut the expenses or revise your budget as appropriate. On the other hand, if you plan on invoicing through your accounting software, then you should develop the client list in your accounting software with as much information as needed to prepare the invoices. Freshbooks is popular with service-based businesses, including marketing agencies. It offers all the features a marketing agency needs to develop a mature accounting function.