An Advertising Agency’s Success Story
A small advertising agency, specializing in niche marketing was having difficulty producing consistent financial reports, and was concerned that they may be inaccurately reporting revenues. Invoicing was inconsistent, and interim financial reports being produced every few days weren’t helping management confidence.
We were brought in to provide advisory services, reviewing their financial reporting and methods, helping with the month end close, and providing tools for tracking their day to day financial activities. Our approach and the services provided for this advertising agency helped get them back on track to success.
The company had been invoicing their customers for deposits, which were being recognized as revenue on their income statements. We found a method in their accounting system that provided for “pre-billing” which didn’t post to revenue. Then, we provided or created specialized spreadsheet tools for them to use, allowing for cash flow forecasting, tracking of their customer deposits by project, and detailing the processing of their month end close.
Reviewing their month end process showed that there was a two-fold process for tracking customer projects, and at month end, these needed to be reconciled prior to invoicing their customers. In addition, invoicing was done in the month after the activity occurred, mismatching revenues and expenses. We guided them to a more accurate method of tracking billing and expenses and created tools to ensure reliable and consistent financial statements, eliminating interim statements. This lessened pressure on the finance department to rush completion of the monthly statements, but confirmed the reason for assuring accurate reporting at the outset.