If You’re an Agency Owner, We Have Tips to Increase Your Confidence About Taxes

Running a marketing agency and being an agency owner comes with challenges — like managing taxes. Many people grapple with concerns about tax codes and benefits, finding a suitable CPA who understands their industry, and ensuring that the accounting services they receive are worth the cost.

To better serve agency owners, we recently conducted an attitudinal research study to find out how much financial knowledge they have, their perceptions of CPAs, and how they can enhance their relationship with them. In today’s blog, we’ll discuss some of the financial concerns shared by many agency owners and provide insights so you can feel confident about your own tax strategy.

Different Segments, Similar Concerns

Our research uncovered three unique attitudinal segments of agency owners: Discouraged & Dismissive, Responsible & Ready, and Supported & Satisfied. Read more about them in our previous blog.

These segments represent varying attitudes towards financial management and CPAs. Still, they all share a commonality — a desire to maximize tax benefits while grappling with uncertainty about how to do so.

Regardless of segment, there’s a pervasive feeling as an agency owner that they might be missing out on potential tax benefits. Many have never heard of specific tax credits and codes that could significantly impact their tax liability. This is why having the right CPA is so crucial.

Discouraged & Dismissive Agency Owners

As discussed in our previous blog, Discouraged & Dismissive respondents consist of agency owners who often ask themselves questions like, “How can I trust a CPA with my agency’s finances?” or “How can I reduce my stress during tax season?” These owners have concerns about navigating the financial aspects of their businesses and don’t trust their CPA’s ability to communicate clearly and offer valuable insights.

If you resonate with this segment, you may have faced situations where your CPA didn’t provide enough details about tax breaks or overcharged for their services. Overcoming these issues requires open communication and setting clear expectations. Seek a CPA offering a flat-fee model, regular touchpoints and ongoing financial strategies.

Responsible & Ready Agency Owners

The Responsible & Ready agency owner segment is engaged with their agency’s finances and actively looks to optimize their financial situation. They seek CPAs who can provide support over the long term and help them navigate complex tax strategies. These owners value education and insights that will improve their financial outcomes.

To address their concerns, Responsible & Ready owners should look for CPAs who are transparent about their fees and processes and proactive in initiating conversations outside tax season. CPAs who collaborate with agency owners and adapt to business and tax landscape changes can become valuable partners in achieving prolonged financial success.

Supported & Satisfied Agency Owners

The Supported & Satisfied segment includes agency owners who are confident in their CPAs and have a positive relationship with them. They actively pursue tax planning and tax breaks and believe their CPA is worth the cost. However, these owners often feel that their CPAs lack specialization in their industry.

For those who identify with Supported & Satisfied respondents, seek out CPAs specializing in the agency world. These specialized CPAs not only understand your industry’s unique needs, but they typically have a network of professionals who can provide targeted support in various aspects of agency operation.

Unique Financial Needs

Whether you align with one of these segments or a combination, your CPA needs to meet your needs. A strong partnership with a knowledgeable CPA can optimize your agency’s finances and help you achieve your financial goals.

One key area agency owners should focus on is understanding cash flow and key financial metrics. Most agency owners feel knowledgeable about revenue, cost of goods sold, and operating income, but they often lack confidence in tax planning, acquiring capital, and identifying tax credits. In fact, we found that only 13 percent of agency owners have a documented financial strategy.

A well-defined financial strategy and staying informed about tax opportunities can lead to more holistic and effective financial management. This will ensure that you keep more of your money in the short term and build long-term financial security, including a nest egg for retirement. A strategic approach also involves looking ahead and considering factors like tax planning, financial forecasting, and optimizing various financial metrics.

Closing Thoughts

Communication is the cornerstone of a successful CPA and agency owner relationship. True collaboration goes beyond periodic financial reports. CPAs who are well-versed in the agency world can provide valuable insights beyond tax planning. They can help with financial reviews, networking opportunities, and optimizing agency operations.

Agency owners face unique challenges managing their taxes and finances. You can be more proactive by understanding your own concerns and identifying which segment you identify with. Find a CPA who specializes in agencies, offers transparent pricing, and communicates regularly to help achieve your financial goals.

Remember, the right financial strategy coupled with effective communication and industry expertise can empower agency owners to confidently manage their taxes and set a course for long-term financial success.

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.