As a marketing agency owner, bookkeeping is likely not one of the things you enjoy doing. It's also probably something that you don't do very often either. Whether this is your first time bookkeeping or you've been bookkeeping for years, certain mistakes made while bookkeeping for marketing agencies will cause severe problems if they aren't fixed quickly. In this blog post, we'll discuss some tips on keeping your bookkeeping in check and saving yourself from financial disasters.
Bookkeeping is the process of recording business transactions and financial information for bookkeeping purposes. It's also the act of looking over these bookkeeping records to make sure they are accurate, legal, and up-to-date.
Bookkeepers provide various services that help marketing agencies save money, time and avoid penalties from late filings or tax payments.
Marketing agencies can outsource bookkeeping tasks to a bookkeeper who is either an employee of the marketing agency or contracted through another company.
Outsourced bookkeeping services provide more accurate results than many individuals would do themselves, especially if they aren't accounting professionals. Using outsourced bookkeepers or software ensures your numbers stay on point all year round with no exceptions, saving you time and money in the long run!
As previously mentioned, there's nothing fun about bookkeeping - but it's something every business owner has to look into at some point. Marketing agencies should not wait until tax season to take a look at the books. Typically, a bookkeeper can identify things early on to help save you money when it's time to pay taxes.
Bookkeeping can help marketing agencies in a few ways. For example, bookkeepers will look for errors and mistakes that could cost your business money if they go unchecked.
Once the bookkeeping review is complete, you'll have the information to create accurate budgets in the future, allowing businesses to see where their spending trends are headed. Such unexpected costs or delays don't catch them off guard.
You'll also be able to rely on bookkeeping reports throughout the year instead of scrambling at tax time when it's too late to fix any problems with numbers! This means no more last-minute tax filing panic come April 15th because bookkeepers keep track of all filings and payments made along the way until taxes are due each year. Bookkeepers provide reports that are easy to understand, allowing bookkeepers to explain tax and financial information in simple terms so marketing agency owners can know where their money is going.
Bookkeepers also provide bookkeeping services during tax season for individuals who don't want the stress of keeping up with numbers themselves or have other responsibilities. They need help managing while taxes are being prepared.
Businesses should not wait until it's too late to look at bookkeeping records. Instead, take a proactive approach because having sound financials isn't just good for your business - it's mandatory! Marketing agencies cannot run without accurate bookkeeping records, which means you have no choice but to find someone reliable who will keep track of all transactions month-to-month.
If you were ever audited or asked to provide bookkeeping records for one reason or another, you'd be thankful that your bookkeeper made sure everything was done correctly and on time.
There are lots of mistakes that marketers can make while bookkeeping. Not filing taxes on time or not paying enough in taxes because you didn't file returns correctly (or at all) could result in hefty fines and penalties later down the road.
Not keeping track of expenses like mileage, meals with clients, supplies used for work tasks - basically any business-related expense you can think of can also cost you.
However, these are just a few examples of mistakes that can be made while bookkeeping. Here are a few possible bookkeeping mistakes to look out for:
Bookkeepers use software to ensure all transactions are recorded in the correct bookkeeping accounts, ensuring your business takes advantage of things like depreciation, payroll tax, or other allowed deductions.
Bookkeepers make sure that each journal entry reflects a true and accurate record of what happened with specific financial transactions during a given time period.
Bookkeepers double-check every transaction against original documentation for confirmation before entering data into accounting records.
Bookkeeping reports will help you determine when customers owe you money so you can take action if they do not pay by invoice terms (usually 30 days). This lets companies know when it's time to send out late fee notices.
Bookkeepers may have a hard time identifying errors that exist if they don't have access to all the information, such as financial reports, bank statements, and inventory records. Whether you're a marketing agency owner or a contracted company providing outsourced services, business owners must provide these records for accurate data from your account.
If you're unable to hire a bookkeeper, you'll have to do it yourself, as it's one of the most important aspects of running a successful marketing agency. While not the most fun activity, it'll end up saving you time and money in the future if you do it right. The first step is to figure out what bookkeeping service you need (daily, weekly or monthly). Depending on the number of clients you have, you may not need to look at your books every week. However, if your books are constantly being updated, you'll need to look at your numbers every week, if not, every day.
You can use a spreadsheet or bookkeeping software to input bookkeeping information. If you use bookkeeping software, make sure it allows your business to track all the necessary expenses and give you reports on invoices sent out and overdue bills. If you use a spreadsheet, you'll want to double and triple-check that your math is correct.
Marketing agencies must track all expenses, including mileage, meals with clients, supplies used at the office, or any other business-related expenses. You can do this by keeping receipts in a designated bookkeeping journal, excel sheet, or software that you have for bookkeeping purposes only.
If you're working from home, this can mean billing home office expenses, wifi, and cell phone bills.
Keeping track of accounts receivable and money owed for a marketing agency can get tricky. Not only do you have a retainer that you're likely owed, but you may also be charging a percentage of advertising spend or have add-on services.
It's essential to keep track of these expenses and make sure you are paid on time. Not only will you have to provide a detailed billing summary to your client, but you'll need to send this in a timely fashion.
Balancing books as a business owner can be tricky since bookkeeping is one of those tasks that you often put off until you've got time to do it. However, it can be a lot easier if you consistently balance your books and make sure your money in and out makes sense.
Spend some time on bookkeeping at the end of each day, week, or month and make sure you leave detailed notes.
If you're an agency owner, you know that every account you have is different. Whether you negotiate a different rate from one account to another, or the services you provide for them are different, you could charge an account something different every month.
By keeping each account separate, you'll know what services were provided, when they were provided, how much each account is costing you, and how much money you're owed.
Whether the client is asking, you need to pay employees or freelancers, or it's tax season, you'll know what your numbers are.
One of the essential bookkeeping tasks you can do is close out any open accounts. You should permanently close out an account at the end of each month, but there may be some cases where you don't want to wait for a whole year before closing it. For example, suppose you have revenue that falls in one accounting period and expenses in another. In that case, it might make sense to close out those two periods simultaneously, so your books are accurate.
One way to make this easier is using bookkeeping software. However, if you're doing this on your own, you'll need to be very intentional about making sure you're closing out accounts and transactions accurately and on time.
If all of the duties of a bookkeeper seem like too tall a task, it may make sense to hire someone. You'll want to find a bookkeeper or accountant that knows enough about marketing agencies to ask the right questions. As an agency owner, you'll also want to find someone you can trust to save you money and take care of your bottom line. The last thing you want is to hire the wrong person and receive a fine or audit from the IRS.
Start by asking around for bookkeeping recommendations. You can ask friends, other bookkeepers, CPAs, and bookkeeping consultants for referrals. Some bookkeepers may offer packages, so you don't have to worry about hiring payroll too.
If you're not sure who to hire, then invest your time into interviewing a few different bookkeepers before deciding who to hire. Don't just hire the first bookkeeper you talk to because they might not be the best fit for your business.
Once you find a bookkeeper, make sure they've done work with other marketing agencies before, making things much smoother. References are critical, so you know that you won't have to babysit the bookkeeper. After all, the reason you're hiring them is to make your life easier.
If doing your bookkeeping sounds like too much, and all the research it takes to hire a bookkeeper sounds stressful, Small Business Mentor can help you find a perfect fit for you. Contact us today, give us some basic information, and we'll send some great recommendations your way free of charge.