As accountants specialising in creative businesses, we’ve worked with hundreds of agencies over the...
Get super-profitable - Step 3
As accountants specialising in creative businesses, we've worked with hundreds of agencies over the years, from start-ups to £5m turnover. Here's a few insights into what the most profitable ones do differently to the rest.
Step 3 - Live on a Cloud
Integrating all your business processes with cloud-based technology eliminates most of the guesswork, as you can work off real time data and be able to see exactly if a decision is going to be profitable or not. Here's the technology that Wow 's top-performing agencies are using right now:
Take Control of your future
One of the best ways to do this is to make sure you have your important financial information at your fingertips. A recent survey of the creative sector, found that the most popular finance solution for agencies is Xero.
Xero is beautiful cloud-based accounting software that makes staying on top of your accounts easy peasy. The User Interface is super intuitive - you'll have it all sussed within 15 minutes of playing with it. There's a neat dashboard with the most important bits of financial information you need to run your business, and you can produce reports that you can easily understand at the click of a button, making it easier to be in control of your agency's future.
Never run out of cash
The other great thing about Xero is that it takes a live feed from your bank account, allowing you to easily see who still owes you money. You can send statements to clients via email in one click, or even use one of Xero's add-ons, such as Chaser, to do your debtor chasing automatically for you. Chaser is one of several hundred apps that integrate with Xero. They're all designed to make your life easier and increase your profitability. Other popular apps for agencies include Float, which will help you forecast your cash flow, and Receipt Bank, which will save you hours messing around with paper receipts.
We've also noticed more and more agencies setting their clients up on direct debits, using tools like GoCardless that have made collecting payments via direct debit far easier & more accessible than ever before.
Achieve more profitable projects
One of the biggest challenges faced by agencies is delivering an amazing project, whilst still making a profit. We see so many agencies walking the tightrope between keeping the client happy and ensuring that the job doesn't overrun as a result of additional client requests. The reality is that there is no simple answer to solving this challenge, but a good place to start is to use a project management app to keep track of things.
The most popular project management tools with our clients are Agency Core, Harvest, Streamtime, Synergist, and WorkflowMax. They can all take care of your quoting, project management, time tracking, CRM, invoicing and reporting. They link with Xero and are really easy to use. Most importantly, they'll allow you to produce a report on your most profitable projects (and clients) at the click of a button. So, say goodbye to spreadsheets and whiteboards.... and hello to more profit.
Spend your time wisely
In a service business, how you spend your time directly impacts the profit you make. The good news is there are loads of great tools out there that will help you spend your time more profitably.
If you're not doing this already, we definitely recommend getting your clients to sign-off each stage of the project using e-signature tools such as Rightsignature or Adobe Sign. By asking your client to sign that the stage is complete, it draws a clear line in the sand and avoids endless tweaks. You can also include a reminder in this document that any amendments will be chargeable after this point. It'll save you lots of time further down the line (or will mean you can charge extra for the work).
As an agency grows, projects can become bigger and more complex, and miscommunications are more likely to happen, often resulting in a less profitable project. Slack is great tool to help you keep your team connected and updated with the latest goings-on with clients, projects, and creative ideas. There's a lot of functionality included in the free version and it's really easy to implement.
Top tip for more profit: What app could you implement today that would make the biggest difference to the profit you make in your agency? You'll be surprised at how easy they are to setup.