Researching Advertising Agency Concerns

What advertising agency concerns do you have in running your business?

To better serve agencies, we recently conducted an attitudinal research study to find out how confident agency owners are with their financial skills, what they think about their CPAs, and how they can have a better relationship with them.

If you’re like the marketing and agency owners in our study, your challenges may fall into these categories: how to save more on taxes, finding a CPA that understands your industry, or receiving accounting services that are worth the cost.

In this blog, we’ll explore the financial concerns agency owners shared with us and effective strategies for addressing them.

Different Owner Segments, Different Concerns

We found three unique segments of agency owners, each compromising about one-third of respondents: Discouraged & Dismissive, Responsible & Ready, and Supported & Satisfied. Regardless of segment, all agency owners believe there are tax benefits they could be taking advantage of, but they are unsure what those benefits entail.

Have you ever asked yourself, “What money could I be leaving on the table?” If so, you’re right in line with our participants.

One-quarter to nearly one-half of respondents have never heard of any tax credits we frequently advise our clients on, such as the credit for employer differential wage payments, work opportunity credit, or empowerment zone employee credit. We also see similar percentages that have never heard of beneficial tax codes, such as the Augusta Rule or qualified business income dedication.

Your CPA should inform you of these opportunities. If they’re not, it may be time to consider a more experienced or specialized accounting firm.

Unsurprisingly, we saw that agency owners want to work with CPAs that can understand their budgetary cycles, financial landscape, and industry’s unique needs. The right CPA with this expertise can help you save significantly on your taxes.

Your advertising agency concerns go beyond the two outlined above. We understand agency owners come in all shapes and sizes. Fortunately, the research methodology we used enables us to reveal distinct differences in how agency owners approach relationships with CPAs.

Discouraged & Dismissive Agency Owners

The primary questions Discouraged & Dismissive respondents ask are:

“How can I trust a CPA with my agency’s finances?”

“How can I find a CPA that is worth the cost and spends time getting to know me as a person?”

“How can I reduce my stress during tax season?”

If this sounds like you, you might be like Discouraged & Dismissive respondents. These agency owners have a lot of worries about navigating the financial aspects of their businesses, especially about being audited. Trusting their CPAs is hard because they use too many complex terms and concepts and focus too little on what opportunities to pursue.

Here’s what one respondent shared with us:

“I left my current CPA because he does not give me the details on tax breaks, everyday expense receipts, payback on taxes, etc. He also told me he would charge $200 and instead charged me $400.”

Getting your money’s worth is important, and finding the right CPA for you and your business can be challenging. We recommend overcoming pricing discrepancies by asking for a pricing model inclusive of regular touchpoints and ongoing financial strategies outside of tax season. A flat fee is a great option, and your CPA should be willing to offer this caliber and frequency of support.

You don’t know what you don’t know, which can cause stress when navigating or planning for the future. Look at the value provided by your current or past CPA. If they fall short of your expectations, assess the relationship.

To find the right CPA, look at thought leaders and talk to trusted peers in the industry. You want a CPA who will communicate frequently, stay up-to-date with tax codes, and have agency expertise.

Responsible & Ready Agency Owners

Responsible & Ready respondents ask questions like:

“How can I optimize my agency’s financial situation?”

“How can I find a CPA I can work with for many years?”

“How and where can I learn more about tax opportunities and other financial strategies?”

If this sounds like you, you might be like Responsible & Ready respondents. This group is engaged with their agency’s finances. Yet, they desire more education and insight into improving their financial outcomes. Specifically, they want to work with a CPA that can be a source of support for many years.

As one Responsible & Ready respondent told us:

“I wish [my CPA] understood tax strategies better and could advise me. I usually have to ask her about different programs and strategies.”

Any CPA you work with should communicate regularly — more than twice yearly — and be transparent about their fees and process. Additionally, you should select a CPA that is proactive about the support they provide you, initiating conversations outside of tax season. The ideal CPA will work with you collaboratively and communicate what is changing or evolving and how you can take advantage of changes in your business and the tax code. Look for thought leaders that have educational materials and share their expertise willingly.

Supported & Satisfied Agency Owners

Supported & Satisfied respondents have fewer questions and concerns than the other two segments. These respondents actively pursue tax planning and embrace tax breaks. They’re open-minded about what’s legally possible within the tax code. Their relationship with their CPA is positive; they trust their advice and say their CPA is worth the cost.

As one Supported & Satisfied respondent told us:

“I think my CPA has broad competency around tax strategy for small businesses in the service sector but is not specialized in my industry.”

For those of you who have an involved, invested CPA, how much of their advice is applicable to owning an agency? Your needs are unique with marketing and advertising agency concerns. A one-size-fits-all approach will fall short of getting you the financial outcomes you want, leaving savings on the table.

One of the perks of an agency-focused CPA is not only their services but their network of providers. Look for a CPA with a network of specialized professionals that can help agencies — for example, experts in law, pension planning, cost segregation, research and development tax credit, employee retention credits, and business transitions.

Addressing Your Financial Concerns

Whether you see yourself entirely in one of the segments, a mix of two or more, or none of the above, your chosen CPA must meet your needs. Although many CPAs are content to sit in a basement crunching numbers during tax season, a true partnership will optimize your agency’s finances. No matter where you are, evaluate your current relationship and see where improvements can be made.

To learn more about each segment’s behaviors and the opportunities they present, check out our entire executive summary. And to explore the data yourself, check it out here.