5 Reasons Why an Ad Agency Should Care About Accounting
For many small businesses, everyday accounting tasks can be a burden. Preparing estimates, invoicing, time tracking—you have to do it, but doesn’t it feel like it should be easier? Automating accounting can give you more time to spend growing your business. Here's how my marketing agency grew using FreshBooks.
Successful small marketing firms are hyper focused on automation—as we should be. At MModern Marketing, we work with sales and marketing teams throughout Canada and the U.S., and since we’re a small boutique agency, without automation we wouldn’t be able to handle our current clients and go after new business.
From sales enablement to content creation, we use tools to help us efficiently manage the one resource we can never get more of—time. But the one facet of business many small marketing agencies tend to neglect is accounting.
It’s not glamorous, and most of us weren’t thinking about invoicing and time tracking when we launched our businesses. But it is necessary, and if done properly—through automation—can actually give us the time and headspace we need to grow our business.
So let’s take a look at 5 ways automation can help small marketing agencies turn accounting into task that can actually help them succeed and grow.
1. Escape from Excel
Excel is a great tool, and for a lot of small marketing agencies starting out, it’s a cheap way to create the necessary accounting documents. But the truth is it isn’t built to scale.
I used to spend countless hours creating invoices in Excel and then making them presentable in Word. But by automating the creation and delivery of invoices, I’m able to spend my time on the work that pays.
So step one of accounting automation is getting out of Excel and into a smarter, more efficient system. There are lots of accounting software options out there, so do your research and find the one that works best for your situation.
2. Streamline Your Cash Flow
Cash flow management is one of the most important aspects of running a successful small marketing agency. The more time you spend managing your cash flow, the less time you have for actual billable work.
One of the best ways to streamline your cash flow is to shorten the cash conversion cycle—basically speeding up billing, collecting, and payments. This can be accomplished several ways:
- Automatically bill for tracked hours. If the accounting software you choose allows you to automatically add your tracked time to the next month’s bill, this will save you from bouncing back and forth from your time sheet to your invoice.
- Get estimates approved faster. The problem with manually creating estimates is there will likely be multiple versions made before the final approval. Keeping up with these versions and revisions can be a headache, and prevents you from getting estimates out quickly. The entire process can take hours.
Whereas if you automate estimate creation (I’ve actually built a library of all of my items in FreshBooks and can now knock out an estimate in minutes), you can get it out to the client immediately.
Also, and this is my favorite feature of any accounting software, when I send clients an estimate in FreshBooks, they are able to approve it with just a click of a button. Then when I receive the approval notification, I can go into that estimate and automatically roll it into an invoice. And the entire process is recorded, giving me an audit trail with exact numbers and customer approval.
3. Reduce Late Payments
We all have clients who for one reason or another always seem to pay their bills late. A few days. A couple of weeks. These missed payments add up, and when you’re running a small firm, that missed income can have a big impact.
One way to eliminate, or at least reduce, missed payments is through automatic late payment notifications. Let’s say you bill on a net 30 schedule; try setting up automatic reminders at day 15, 20, and 30. Not only does this keep clients aware their bill due date is coming up, but it also gives you an audit trail for reference.
4. Staffing Considerations
Need a designer, a copywriter, social media specialist? Don’t carry that cost during down times. Allow your business model to be flexible and expand and reduce the number of staff you have on payroll depending on the workload.
This Uber model of staffing allows agencies to meet every client's specific needs without draining resources during slow periods. Plus, when I'm able to get contractors to submit their invoices through FreshBooks, I can roll it into my system and pay it online and keep track of my payroll in one place.
5. Spend More Time on What Matters
So now that you’ve automated the accounting tasks every small business struggles with, what are you going to do with all that extra time? Well, go after new business, right? Of course.
We all want to grow our revenue stream and ensure we have the tools to continue providing our clients with the products and services they rely on, but for me, there was another avenue to add value with my newfound time: giving back.
One of the not-for-profits I volunteer my services to is Head First Development, which helps rescue the daughters of women who are being sexually exploited. Head First works with the local community to get at-risk young women out of dangerous environments and give them the gift of education. Through nursing scholarships, these women are able to escape the cycle of prostitution and become healthy, productive citizens of the world.
Never thought accounting could do some much, right? That’s the power of automation. When we run every aspect of our business efficiently, the tedious but necessary tasks become an opportunity for growth, and just maybe, an opportunity to give back.