4 Key Financial Reports to Manage Your Advertising Agency
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What accounting or billing features do you need to properly manage your advertising agency? Here are some of the key financial reports that can assist creative folks with agency financial management and project profitability, including profit analysis, staff utilization, efficiency, and WIP reports.
Before we jump directly into agency financial reports, we need to consider that many ad agency owners have been using accounting systems such as QuickBooks® and Simply Accounting for many years and they don’t want to switch accounting systems when shopping for agency management software. Creative directors are keen to see all the key job financial indicators within their agency management software. In order to accomplish this task, I would recommend selecting an agency management software that can be integrated with, let’s say, QuickBooks®, Simply Accounting or any other accounting system in the marketplace. By doing so, you will have the flexibility to integrate invoices and expenses directly within your favourite accounting system.
At Function Point, our clients have the ability to create invoices and expenses in our system and seamlessly integrate with different accounting packages so their accountant or bookkeeper doesn’t need to double enter invoices into their accounting systems.
Below is a list of financial reports that are used by our clients to improve overall productivity and profitability of your advertising agency.
1. Profit Analysis Report
This report allows you to compare estimated to actual costs, billable and invoiced amounts to give you a clear understanding of how profitable your work or agency is. You can apply filters while creating the report to show specific information such as client name, project, job, date ranges, and job statuses, to name a few.
2. Staff Utilization Report
This agency utilization report provides a summary view of available staff hours, hours worked and billable hours organized by role and staff. It also displays the total available hours for staff in a given date range, their target billable hours (set in staff details page), the total hours worked and the amount of those hours that were billable.
3. Efficiency Report
This advertising agency report provides information on the efficiency of all of your active staff. Information includes the number of billable and non-billable hours, as well as the values of the billable hours versus the payroll cost of the individual. The number of jobs worked on by the individual is also included.
4. WIP – Work in Progress Report
This report display job level details and agency financial information such as a break down of actual, estimated, variance, invoiced and un-billed values.
These are some of the reports that will help you manage projects at your ad agency and avoid project overruns. The purpose of using ad agency project management software is to give you a clear understanding of what jobs are profitable, look at your staff utilization, scheduling, timelines and anything directly related to your day-to-day activities. Keep in mind that you still need to use your accounting system, such as QuickBooks®, to generate balance sheets and cash flow statements.
Let us show you how we can integrate ad agency accounting and ad agency management software for your organization. That’s all for now if you found this blog interesting be sure to share with your friends and coworkers!