Mistakes independent agencies make and how to avoid them

Do you have the right finance resource?● Large spectrum between necessity and best practice

● Lack of investment in finance overhead:

- People

- Systems

Do you have the right system?● Using a basic bookkeeping system is one of the major mistakes agencies make

● All companies need an accounting and payroll system but agencies also need one or many additional capabilities including CRM, Traffic, Timesheets, Production, Media

● Without this capability you cannot get accurate and relevant reporting

● Revenue always the focus but what about other measures

Do you get the right reports ?● Detail reporting allows you to make timely business decisions to improve the efficiency and profitability of

the business

● You should be getting a range of reports including:

● Staff Utilisation

● Client profitability

● Job profitability

● Departmental profitability

● Detailed margin analysis

● Job overrun reporting

● Debtor days

● Multipler analysis

Do you budget and forecast?● Do you do monthly revenue forecasting by job?

● Do you do a budget at the start of the financial year?

● Do you know your likely year end profit position?

Are you compliant?● There are so many areas of compliance in the Finance space:

● Payroll Tax

● BAS

● PAYG

● Superannuation

● FBT

● 457 training spend

● The cost of non compliance is massive

Are you getting the right tax advice?● Things to look for when choosing a tax accountant:

1. Do they ask lots of questions about your business?

2. Do they specialise in your industry?

3. Do they offer extra services ?

4. Do you get along with them?

Are you worried about cash flow?● Cash flow is often the biggest worry in a small / medium business

● What should your baseline be?

● Do you know what your upcoming tax liabilites are?

● Even when making a nice profit cash flow often doesn’t reflect this

● Important to stay on top of debtors and have working capital/ cash flow measures and reporting in place

Is your process safe?

● Dual approvals on bank transactions imperative

● Fire drill- dealing with problems as they arise rather than having a process that prevents panic

● Tight billings process vital

Do you have the right Insurances and Broker?

● What questions do they ask to get to know your business?

● What experience do they have in the industry?

● Are they are cultural match for your business?

● Has your service level been established?

● Can they help with Life insurance?

● Are they only worried about finding the cheapest solution?

● Do they ‘roll over’ your policies each year without offering you any alternatives?

● Have they discussed insuring bad debts?

● Do they explain why one quote/insurer is better suited than another?

Are your staff motivated?

● Remuneration structure for staff

● Communication of results with management team / entire agency

Who is managing hr?● HR management fire drill?

● Is there a culture of continual coaching?

● Pay reviews on merit?

● Do you onboard?

● KPI’s set to business goals?

Other Questions

● Do you get HR advice on terminations/redundancies?

● Do you ensure a lawyer reviews all your clients contracts?

● Do you have employee contracts that are up to date with current legislation?

Quick Tips

● Make sure you have an Industry based system and finance team

● Get to know your balance sheet

● Ensure you have safe and efficient processes

Thank you!