The ROI of a marketing campaign can vary greatly depending on the industry, target audience, and campaign objectives. However, a "good" ROI for a marketing campaign is generally considered to be any return that exceeds the cost of the campaign. The industry average ROI for a marketing campaign is difficult to specify as it varies widely based on the type of campaign, the marketing channel used and the industry.
For example, a direct mail campaign may have a lower ROI than an email campaign due to the higher costs associated with mailing physical materials. Similarly, a B2B campaign may have a higher ROI than a B2C campaign due to the higher lifetime value of a business customer.
A couple general rule of thumb are:
However, it is important to keep in mind that ROI is not the only metric to measure the success of a campaign, and it's important to set specific and measurable goals for your campaign and evaluate the campaign based on its performance against those goals.
It's also important to consider the long-term benefit of a campaign, such as increased brand awareness or customer loyalty, which may not be reflected in short-term ROI calculations.
Do you know the ROI on your client's campaigns?
The balance sheet displays what a company owns, owes and the net is the equity built up in the company.
The Profit & Loss Statement is one of the most important reports you can use as a business owner.
The P&L tells you exactly how much money you've made over a given period of time.
Top portion = Revenues
Below top portion = Cost of Sales (direct costs related to generating revenues)
Bottom portion = Operating expenses (indirect costs related to business operations)
Revenue - COS = GROSS PROFIT (Profit before indirect costs)
COS - Operating Expenses = Earnings Before Tax *EBT
EBT - TAX = NET INCOME
Accurate bookkeeping is crucial for the success of small businesses for several reasons:
1. Legal compliance: Keeping accurate financial records is a legal requirement for most businesses, and failure to do so can result in fines or penalties.
In Canada, small businesses are legally required to keep accuratefinancial records and records of their business transactions. This includesmaintaining accounting books and records that accurately reflect the financialposition and performance of the business.
Here are a few specific requirements for small businesses in Canada:
A. Keep records of all revenue and expenses: This includes invoices, receipts, and financial statements.
B. Keep records of all assets and liabilities: This includes property, equipment, and inventory.
C. Keep records of all taxes: This includes GST/HST, payroll taxes, and income taxes.
D. File your GST/HST return on time and remit any amount owing.
E. File a personal income tax return and remit any amount owing for income taxes (sole proprietors).
F. File annual corporate income tax return and remit any amount owing (for incorporated smbs)
It's worth noting that the specific bookkeeping requirements mayvary depending on the type of business and industry. Therefore, it's alwaysrecommended to consult with a accountant or a tax professional for the specificrequirements to stay compliant.
2. Tax preparation: Accurate bookkeeping is necessary for preparing and filing tax returns, as just stated, is legally required! Without it, businesses may end up paying more taxes than they owe, or face penalties for underpaying. A few required tax filings as stated below:
A. GST/HST returns: Businesses that are registered for the goods and services tax (GST) or the harmonized sales tax (HST) are required to file regular GST/HST returns, reporting the GST/HST they have collected and the GST/HST they have paid on their expenses.
B. Corporate income tax returns: All Canadian-controlled private corporations (CCPCs) must file a T2 corporate income tax return annually.
C. Payroll deductions: Employers are responsible for withholding payroll deductions from employee paycheques, including income tax, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums. Employers must remit these deductions to the Canada Revenue Agency (CRA) on a regular basis.
D. T4 and T4A slips: Employers are required to provide T4 slips (Statement of Remuneration Paid) to their employees, detailing the total income and deductions for the year, and T4A slips to independent contractors and other individuals, detailing any other income they have received.
E. T5 slips: Businesses must issue T5 slips to report investment income, including interest, dividends, and capital gains paid to investors.
F. T5018 slips: Businesses that pay amounts to contractors are required to issue T5018 slips, which report the payments made to contractors.
It's worth noting that different types of businesses, or businesses in specificindustries, may have additional tax filing requirements. Also, as the laws andregulations can change, it's always recommended to consult with a accountant ora tax professional for the specific requirements in accordance to your businessand current regulations.
3. Business performance: Bookkeeping allows businesses to track their financial performance over time, which can help them identify areas where they are doing well and areas that need improvement. This information can be used to make informed business decisions. Knowledge is power when running a business. Accurate bookkeeping enables businesses to track and measure various financial metrics that can provide valuable insights into the performance of the company. Here are a few examples:
Profit and Loss: The Profit and Loss statement, also known as an income statement,shows a company's revenue and expenses over a specific period of time. Thisallows the business to understand the overall profitability of the company andidentify areas where cost savings can be made.
CashFlow: The cash flow statement provides insight into the company's ability togenerate cash and manage its cash balance. It shows the cash inflow and outflowfrom operations, investments and financing activities.
Return onInvestment (ROI): The ROI is a measure of the efficiency of an investment orthe performance of a company. ROI is the ratio of the net profit of aninvestment to the cost of the investment.
AccountsReceivable and Payable: Accurate records of accounts receivable, which are theamounts owed to a business by its customers, and accounts payable, which arethe amounts a business owes to its suppliers, are crucial for a business tounderstand how long it takes to get paid and how long it takes to pay its ownbills.
Inventory: Accurate records of inventory levels, cost of goods sold and inventory turnovergive the business insight on its stock management and performance.
Break-even Analysis: This metric allows the business to understand the point at whichrevenue covers all the costs. Knowing your break-even point can help you makebetter pricing decisions and plan for growth.
Accurate bookkeeping is the foundation for all these metrics, without it, you can't havea clear picture of the financial performance and health of the business. Thesemetrics, in turn, can give a business owner a better understanding of thefinancial health of their business, and allow them to make informed decisionsto improve profitability and growth.
4. Obtain funding: Accurate financial records are often required when applying for loans or other forms of financing. Lenders and investors will want to see that a business is financially stable and has a track record of success before providing funding.
5. Forecasting: With accurate historical financial records, it is easier to forecast future trends and performance, allowing better decision making.
Overall,accurate bookkeeping is essential for the success of small businesses. It helpsensure legal compliance, facilitates tax preparation, enables businesses totrack their financial performance, obtain funding and forecast futureperformance.
Accounting is an essential part of running a successful small business. It involves tracking financial information such as income and expenses, using accounting software or traditional bookkeeping methods to keep records of transactions, and preparing reports like the income statement, balance sheet, and cashflow statement.
Why is accounting important for businesses? For one thing, accounting helps businesses understand their financial position at any given point in time. This can help owners make better decisions about managing their business operations and finances. Additionally, accounting can provide valuable insights into how well a business is performing compared to its competitors and industry norms.
Another key role of accounting is recording debits and credits for all financial transactions that take place within the business. Accounting systems use these debits and credits to create a balance sheet, which provides an overview of a business's assets, liabilities, and equity. Additionally, accounting software can also be used to create a cashflow statement, which helps businesses understand the flow of their incoming and outgoing funds.
Whether you are running a small business or managing accounting for a larger organization, knowledge of accounting basics is essential. Whether you are analyzing financial statements or entering transactions into the general ledger, understanding accounting concepts will help you make better decisions and contribute more effectively to your organization's success. So if you're looking to boost your accounting skills and knowledge, start with learning about balance sheets and cashflow statements today!
In accounting, one of the most important tools is the income statement, which helps businesses understand their incoming and outgoing funds. This statement provides an overview of a company's revenues and expenses during a certain period of time, such as a quarter or year. It can also give insight into how well a business is performing over time and help with strategic planning for future growth.
In addition to analyzing financial statements, accounting professionals are responsible for recording transactions in the general ledger and maintaining accurate records of all financial activity within an organization. Whether you work as a bookkeeper or accounting manager, it is essential to have strong knowledge of debits and credits and other basic accounting concepts. With these skills under your belt, you'll be able to contribute more effectively to financial reporting and management decisions.
Financial accounting is an integral part of any business, large or small. Whether you're analyzing a company's financial statements on a quarterly or yearly basis, accounting provides important insights into the health and performance of a business. Additionally, accounting helps businesses plan for the future by providing insight into how current trends are impacting revenue, expenses, and cash flow.
Whether you work in accounting as a bookkeeper or accounting manager, it's essential that you have strong knowledge of debits and credits and other basic accounting concepts. With these skills under your belt, you'll be able to provide more valuable insights to key decision-makers within your organization and help ensure that your business continues to thrive in today's dynamic marketplace.
At its core, accounting is simply the process of tracking and analyzing financial data for a business. This can include things like revenue, expenses, cash flow, and assets, all of which are essential to understanding how your business is performing and where you can make improvements.
Whether you're running a small business or overseeing accounting at a larger organization, accounting plays a critical role in helping you make smart decisions about the direction of your company. So if you want to be successful in this field, it's important to stay up-to-date on accounting best practices and trends so that you can provide valuable insights and guidance to others within your organization. Good luck!
Does your agency have an office?
Are you 100% all in the office or have a combined remote working & in person office work?
These questions matter and statistically vary from age group to age group.
Office = expensive
What to do?
Think of your current staff,
If not, you probably need to.
This is because of inflation, think of gas prices now versus a couple years ago (or even months ago).
And it's kind of an expensive time to be living right now and you probably need to increase your fees.
I.e. Therefore, for you to provide same level of service (ex. because of increase in agency expenses), you need to charge more or you will be losing money.
Don't just take our word for it:
HST = HARMONIZED SALES TAX, it's the tax you see on most receipts you receive as it is an end consumer tax.
As soon as you bill over $30,000 then you are not a "small supplier" anymore and must register for an HST number and start charging HST on your invoices.
It's 2022 and you billed $29,000 so far for your agency's services, since you are almost at threshold for HST number and notifying client that you will begin to charge HST (13% tax here in ON). You can elect to voluntarily charge HST whenever you want below threshold before it becomes mandatory.
Your digital marketing services you bill one client
= $1,356 TOTAL INVOICE AMOUNT
The $156 you collected, you need to remit to the CRA quarterly/ yearly/ or monthly.
Do no spend this as it's not your money and it is due to the gov't.
This HST has nothing to do with your personal taxes/ sole proprietor taxes.
From that $1,200 you collected (less expenses), you will be taxed a % depending on your tax rate.
Let's say the entire year was this one $1,200 invoice and you had no expenses. Your tax rate assume 12.75%
You would owe the government / CRA
($1,200*Taxrate) + $156 in HST
= 153 + 156
would be your total tax liability all else equal.
An HST return is basically HST collected - HST spent (on your expenses)
Since you already gave HST to another business (as an expense) you don't need to pay it to the government.
This HST you charge, you must remit to the CRA at the end of the year so do not spend this money. However, the HST you spend on purchases, you can reduce the HST owing by the HST you have spent out.
You must put this HST number on your invoice as well so the receiving company can use this for THEIR HST tax credit.
Put in your business number (hst number) followed by RT0001
Put in your access code number
Reporting period, most other fields probably do not apply.
Next page allows you to enter the HST collected
Net this amount from the HST on the receipts you have spent
Gives you the total you need to file and pay.
If you have any questions re: your HST situation, please let us know we'd love to help.
So you have some clients and you think you are on top of the world, which is great, but sometimes it doesn't work out and clients leave... and they will, you cannot satisfy everyone and people rely on revenues being 100% into the future. If you are not acquiring new clients, you are falling behind and client churn will eat your agency alive. Expect some clients will constantly be shopping around and you cannot hand hold all your clients and scale. This means that fancy new office you signed a lease on might be too expensive.
Can you accurately price a potential new client on a call? Do you know how much you are spending per month on salaries, office expenses, apps? Cash is royalty and you need to understand where every dollar is going so you can invest when needed and stop spending in certain areas.
Agency owners also like to forget about the CRA and what is due to them! When your invoicing your clients, there's that 13% HST that is NOT YOURS to spend and you are just holding it for the government. Always know your tax liabilities so you actually know how much money you can reinvest or take out without putting financial strain on the agency. Nothing is worse than being extremely tight for money.
Are you running an agency or are you a consultant? There is a huge difference in what you would charge and how you spend your time. Running an agency means you are selling marketing packages, being a consultant means you are billing for your hours. As a consultant you are limited to how much time you have, whereas an agency can have virtually limitless clients. If you are trying to start an agency and spending too much time on client work, you can't focus on new client acquisition, research & dev, keeping your staff happy, and other CEO related tasks.
An agency plan will keep you motivated and give you direction, this is key for benchmarking progress and determining where you need to focus your time. Without an agency plan, where are you going?
The creative process is changing, automation is rampant in virtually all departments of the modern agency. Not automating and ignoring changes in how businesses are functioning will cut your growth and you will not be around for long.
A bookkeeper is one who takes care of the bookkeeping function of an organization. An online one, is just that, a bookkeeper that works with clients online. An online bookkeeper is deemed a "more modern" bookkeeper because online bookkeeping is a relatively new type of bookkeeping. Bookkeeping used to be done using actual books, only physical invoices, receipts, purchase orders and other physical, financial related documents, and it was very tedious and took a lot more time to process these documents compared to how fast they can be processed today.
A modern bookkeeper is one who uses the "most advanced" accounting technology for your specific industry thats available.
Bookkeeping and accounting are intertwined in the sense that a bookkeeper may perform full cycle accounting where an accountant does not usually do any day-to-day processing of an organization's transactions but tasked with making sure the financials are produced (Profit & Loss Statement, Balance Sheet Statement, Cash Flow Statement) and the organizations obligatory tax filings are being filed (For a corporation you need to file a T2).
Bookkeeping can be done both manually or you can subscribe to an app that takes care of your bookkeeping.
What's the difference between having a traditional bookkeeper using using a bookkeeping firm and having a bookkeeping app with added support?
Charges per hour
A number of bookkeepers
Technologically versed in limited number of apps
A person who utilizes online bookkeeping apps to prepare the bookkeeping entries and transactions for a number of clients. They may or may not complete tax returns for the company.
Some key elements that could be included in a Creative Agency business plan include:
EX. Creative Agency X is a full-service branding, design, and digital marketing agency that helps businesses of all sizes stand out in today's crowded market. We specialize in creating compelling and effective campaigns across a variety of mediums, including print, digital, and social media. Our team of experienced professionals has a proven track record of success in the industry, and we are dedicated to delivering exceptional results for our clients.
Our mission is to help our clients achieve their business goals by providing them with the highest quality creative services. We understand that every business is unique, and we work closely with our clients to understand their specific needs and develop customized solutions that will help them succeed. Whether it's a new logo, a website redesign, or a comprehensive marketing campaign, we have the skills and expertise to deliver results that will help our clients grow and thrive.
With a focus on results and a commitment to excellence, Creative Agency is the perfect choice for businesses looking to take their marketing efforts to the next level. We look forward to the opportunity to work with you and help your business stand out in the marketplace."
It's a brief but informative summary of the business and its services, mission, and values. Also, it gives a little taste of the team expertise and highlights the importance of understanding clients need and providing customized solutions.It's important to note that you should make sure that your executive summary accurately reflects your business and its goals.
EX. Creative Agency X is a full-service creative agency that specializes in helping small businesses and startups establish their brand and succeed in today's competitive market. Our team of experienced professionals has a passion for working with entrepreneurs and business owners to create effective and affordable marketing solutions.
Our mission is to empower small businesses and start-ups to level the playing field with larger companies by providing them with the same level of professional, high-quality marketing that they would expect from a bigger agency, but at a fraction of the cost. We understand the unique challenges facing small businesses and start-ups, and we work closely with our clients to develop customized marketing strategies that are tailored to their specific needs and goals.
We provide a wide range of services, including branding, graphic design, web design, social media marketing, and content creation. We take a holistic approach to marketing, and we believe that every aspect of a business, from the logo to the website to the social media presence, should work together to create a cohesive and effective brand.
Our team of professionals have extensive experience working with small businesses and start-ups, and we are dedicated to providing our clients with the highest level of service and support. We understand the importance of building strong, long-term relationships with our clients, and we take the time to get to know our clients and understand their businesses inside and out.
In summary, Creative Spark Agency is the perfect choice for small businesses and start-ups looking to establish a strong, effective brand and succeed in the marketplace. With our commitment to high-quality service and support, we're confident that we can help our clients achieve their business goals."
This business description gives an overview of the agency's focus, services, and mission while highlighting the unique needs of small businesses and startups. it also mentions the cost-effective solutions the agency provides. With this, it gives a sense of the agency being unique, being experts in working with small businesses and startups, and being cost-effective.
Conclusion and next steps: A summary of the agency's business plan and a discussion of next steps, including any additional funding that may be required.
With on premise data storage and software being a thing of the past, companies are turning to all cloud based apps and team structure. What does this mean? This means a big squeeze for creative agencies to pump out more sales-converting-creative-assets, faster, and for less.
The process flow on which you onboard and start producing needs to be fast and efficient.
The analytics need to be on point. This usually means a specialization in an industry as to gain expertise.
This information is useful for those yearning to get into the creative industry and want to start picking up some much needed accounting skills and know how!
Now where to begin?
Point of accounting is to know how much $$$ you are making (profits) and how much money you owe the CRA (Canada Revenue Agency). Or how much money you are losing...
You generate profit by selling your agency services (Agency Sales) for more than it costs you to build out said services (Cost of Agency Sales or COS).
SALES - COS = GROSS PROFIT
Probably some expenses not directly related to a specific client, but needed to run your agency.
This would be your agency's operating expenses (OPX).
GROSS PROFIT - OPERATING EXPENSES (OPX) = EARNINGS BEFORE TAX
After you subtract taxes (corporate taxes) from that you get your agency's Net Income.
EBT - TAXES = NI
And then bam, you know how to calculate your agency's net income after corp taxes.
All of this info would be found on the accounting statement known as the "Income Statement" aka "Profit and Loss Statement" aka how much money is my agency making over X period of time.
Ok great, so let's say this past year you invoiced $120,000 for social media management and you spent $45,000 on graphics and you started Jan 01, 2021 and your fiscal year end is Dec 31, 2021. And this is your first year of business.
T (if you are incorporated, you'd fill out a T2 form and submit to CRA, this is due 6 months after your year end, they want the money within 3 months though)
NI This is how much money you get to take home... not quite
Depending on you would pay yourself, there are even more taxes.
If this stresses you out, stop stressing, Klnda can help you automate all your accounting needs and is supported by the friendly team flip 😀