Get a Financial Strategy, Don’t Just Manage Your Money

Managing your finances is crucial to running a successful business — especially when you’re a marketing or advertising agency owner.

To better serve agency owners like you, we recently conducted an attitudinal research study to find out how confident owners are with their financial skills, what they think about their CPAs, and how they can have a better relationship with them. We uncovered three unique attitudinal segments of agency owners: Discouraged & Dismissive, Responsible & Ready, and Supported & Satisfied.

As we discussed in a previous blog, agency owners have diverse attitudes when it comes to financial management, engaging with CPAs, and tax planning. If you’re curious to learn more about their similarities and differences, check out our Executive Summary.

But successful financial management isn’t just about managing money. You need to have a financial strategy and regular communication with financial experts. In today’s blog, we’re looking at agency owners’ attitudes about their financial acumen and tax-saving strategies.

Discouraged & Dismissive Agency Owners

As discussed in our previous blog, around 32 percent of respondents fall into the category of Discouraged & Dismissive agency owners. This group believes that their financial management skills are strong enough to handle tax planning without the help of a CPA. They hesitate to trust others with access to their agency’s finances and find CPAs intimidating.

They view tax-saving opportunities as a legally “gray” area and are stressed about audits during tax season. This suggests that while they view their money management skills as strong, they are less confident in creating a holistic financial strategy.

If this sounds like you, agency finances must go beyond basic transactions and tax filings to help ease the anxiety. Consulting with an expert can help you take advantage of opportunities and avoid the financial pitfalls of inexperienced tax planning.

There are CPAs out there that will work with you and provide services and education at a price and cadence that makes sense. Additionally, free resources are available to gain knowledge and understanding about the tax benefits.

Responsible & Ready Agency Owners

Comprising 33 percent of our respondents, Responsible & Ready agency owners prefer building long-term relationships with their CPAs and collaborating on a financial strategy. They actively seek legal tax-saving ideas and desire ongoing financial guidance throughout the year.

Their biggest frustration comes when their CPAs lack an understanding of the unique benefits and challenges of running an agency. Therefore, they feel like they have to be in the driver’s seat regarding different tax-saving programs and strategies. However, they feel inept in tax planning, acquiring capital, identifying tax credits, and securing buy-in from investors.

If you identify with this group, creating a financial strategy that integrates tax planning with key financial metrics can lead to better financial management and fewer missed opportunities. Your CPA must be forward-thinking and proactive instead of reactive. They should communicate with you regularly and come to you with opportunities that save you money throughout the year.

Supported & Satisfied Agency Owners

Accounting for 35 percent of respondents, Supported & Satisfied agency owners trust their CPAs implicitly and believe the cost is worth the services. These owners actively engage in tax planning and embrace tax breaks that align with the tax code.

Respondents in this category are more likely to take advantage of tax opportunities, including the Augusta Rule, Qualified Income Business Deduction, and the Accountability Plan for Reimbursement Expenses.

If this group sounds like you, we have some advice: Tax planning is a 12-month-a-year process, and your agency can save thousands by implementing and leveraging different financial strategies throughout the year. However, we found that only 19-20 percent of respondents are taking advantage of the deductions mentioned above. Make sure you are not leaving money on the table.

Closing Thoughts

Managing cash flow and calculating key metrics such as revenue, cost of goods sold (COGs), and operating income are areas where two-thirds of respondents feel knowledgeable. Managing day-to-day finances is part of owning a successful and profitable business.

However, managing money is not enough. As the financial landscape evolves, agency owners must be proactive regarding tax planning if they want to have a sound financial strategy.

CPAs that offer continuous communication and a tailored financial strategy are the pillars of success for modern agency owners. By partnering with a proactive CPA, agency owners can confidently steer their business toward financial prosperity, no matter what their agency’s size or growth ambitions.

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.