What's the difference between a successful agency and one that struggles or fails?
Typically an agency, such as one that provides marketing, digital, PR or web services, will struggle or fail because the agency doesn't charge enough for projects and they burn out. These agencies take on small projects for cash flow, hoping that the relationship will grow and they will be able to increase billing some day. This often does not happen, leaving them with a string of unprofitable projects.
A contributing factor to this situation is that marketing agencies might not have the insight or information to understand the profitability of their projects. Therefore, not realizing how unprofitable many projects are, considering the time spent on them and what that time is worth, leaving them unable to adjust their pricing accordingly. This causes marketing agencies to win projects in the short-term that appear to be cash flow-positive but lose in the long-term because working on unprofitable projects takes resources away from generating and working on more profitable ones.
While many companies start off with "shrink-wrap" accounting software such as QuickBooks, Freshbooks, Xero, and Sage, they soon find that these packages fall short, as they fail to provide the insight needed to run successful and profitable projects. Vital tasks such as expense tracking, Work-in-Progress (WIP) billing, and contract revenue recognition can overwhelm marketing agencies as they grow. Lightweight accounting software and Excel spreadsheets waste time and can leave you in the dark.
By contrast, accounting software that delivers integrated project accounting capabilities like Intacct Cloud Financials enables service-based organizations to streamline these functions and gain the visibility needed to stay on top of project costs and client fulfillment, without having to decipher a pile of Excel spreadsheets.
Accounting software with project accounting capabilities such as Intacct help marketing, advertising, PR, digital and web agencies stay on top of critical project costs and to better meet client needs, without having to manage this information in Excel spreadsheets.
Intacct's project accounting module allows you to monitor project performance in real time with P&L statements and dashboards:
Another issue that hurts marketing agencies as well as many professional services agencies is not getting paid in a timely manner. Accounts receivable invoice aging over 30 days is a problem, and many tolerate 45, 60 and even 90 days because they don't monitor it.
Intacct's Project Accounting and AR invoicing helps agencies get paid faster by offering the following:
This shortens the cash cycle, ensures that invoices don't get lost and even improves client satisfaction when billing is clear and consistent.
We are the leading Intacct accounting software reseller and integrator in Seattle, Portland and throughout both Washington and Oregon. We've implemented Intacct for many marketing, advertising, PR, and web agencies.
We believe that Intacct is the best accounting software for marketing agencies because of the clarity it gives you on project and overall profitability.
Download our research note by filling out the form below to learn how you can achieve more profitable financial success: