Accounting for Advertising Agencies
How accounting for advertising agencies can help
It's important for all medium-sized and large companies to bear in mind that the accounting process must be carried out with total responsibility. Advertising agencies must therefore be aware of their particularities. And in this post we're going to give you some valuable tips so that marketing companies can find the best outsourcing for their financial affairs.
Unlike in the past, advertising agencies are dealing with financial issues in a different way. Advertising agencies are now responsible for managing a large part of the advertising budget. In other words, so that the employees of advertising companies don't get overwhelmed with financial matters, it's ideal to outsource finance.
You need to keep an eye not only on the advertising budgets of large advertising companies. Cash flow, so that you have a real idea of how much money is coming in and going out of your company. Revenue and invoicing, with special attention to the tax burden. All the extra hires and the budget risks this can cause. And, most importantly, financial control through outsourcing, especially for advertising agencies.
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Cash flow
The cash flow for advertising agencies, which can be outsourced, will take into account some specific aspects. It looks at income, which is the amount to be added to the cash flow; it looks at expenses, which range from staff costs to water, electricity and telephone costs.
The big difference in accounting for advertising agencies is the order in which the ads are paid for. Because, in general, digital media ads are paid for in advance of being broadcast.
When advertising agencies outsource their finance department, they must be aware of the company's real financial resources. The majority of advertising agencies deal with third-party funds in their cash flow, and it is dangerous to use these funds when times are tight. In other words, it needs to be kept away from the company's revenues, and Accounting for Advertising Agencies is the person who can carry out this control.
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Differences between Revenue, Billing and Taxation
Advertising agencies have different tax systems. However, outsourced accounting firms can choose between the three tax systems in force in our country.
You can choose Simples Nacional, which aims to simplify taxation. This means that all national, state and municipal taxes and the INSS employer's contribution will be paid in a single lump sum; one of the best options for medium-sized and large companies, with many collaborators.
Another option for paying taxes is to choose Presumed Profit, where a profit rate of 32% is used to pay Income Tax and Social Contribution on Net Profit and fixed amounts for COFINS and PIS. This choice can be made for companies that are more profitable.
But among the accounting options for marketing and advertising companies, they can analyze the possibility of accessing Real Profit taxation. This method consists of paying a tax base of IRPJ and CSLL. However, it is also recommended for companies operating with lower profit margins. Another issue that should be taken into account when making this choice is that COFINS and PIS are higher in this case.
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Be very careful with extra hires
Nowadays, there are many employees who don't work under the CLT regime, but rather on demand, and in the Marketing and Advertising market, this is becoming very common. This type of work may have lower costs, but many extra employees end up generating a lot of expenses.
Even though the majority of freelancers work remotely, there are still expenses involved in hiring them. Accounting focused on advertising agencies therefore aims to calculate these expenses generated by hiring freelancers. In other words, forms of payment and also the analysis of supplies for remote workers are calculated by the Finance department and the Accounting Consultancy can be of great help in this planning.
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Accounting for advertising agencies
There is a need for financial care in cash flow management for advertising agencies. And there are also a multitude of tax burdens, which must be very well observed by professionals in the finance department. Hiring an outsourced company for a marketing agency can help companies avoid any scares or receiving institutional summonses or sanctions.
Have a company contracted to outsource the financial control of advertising agencies and marketing companies, who are excellent tax experts. Having accounting consultancy partners can prevent your marketing and advertising company from paying more taxes or unnecessary fees due to a lack of knowledge about taxation.
The accounting control process must be carried out efficiently and on a regular basis by outsourcing accounting to marketing and advertising companies. In other words, accounting and cash flow periods should be set according to prior planning. There are no rules regarding this period, but ideally both should not be carried out over too long a period of time.
However, we must be very clear that the integration between the finance department and the companies that will be outsourcing the accounting for marketing companies must be absolute. This is because the lack of information or of the real amounts of expenses and income can be a hindrance to the work of the accounting firms.
In today's competitive market, the search for good outsourcing service providers for advertising and marketing agencies has become very intense. Make sure the company you hire is reputable and don't waste any more money on taxes.
If you need to rely on experienced accounting advice, capable of providing the best strategies for your company to improve its financial performance, get to know CLM Controller's solutions now.
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