One way to get started improving your financial health is by implementing the best practices for your specific industry. To measure overall performance you have several options. One of the most popular is analyzing earnings before interest, taxes, depreciation, and amortization (EBITDA). Looking at earnings before interest, taxes, depreciation, and amortization is a generally good way that you may get a picture of your content marketing company's financial performance. Some accountants for content marketing companies see this formula as an improvement over using earnings and net income.
However, for all of its benefits, EBITDA has its downfalls. It removes the cost of capital investments of things like equipment, property, vehicles, etc. EBITDA only measures profitability. Basically, it’s a fancy way of describing the money left over after your expenses are paid but before taxes.
EBITDA gives your CPA for your content marketing company the ability to compare your business profits margin to other companies around the world without needing to factor in the different tax systems that different countries have.
What Can Your Content Marketing Company Learn from Gross Margin Benchmarks?
Gross margin is a metric your accountant may use to determine the profitability of your firm. It paints a picture of how well your company does at earning revenue. It evaluates how well your company does at delivering projects to clients while staying under budget. Gross margin is one base on which profitable content marketing companies might grow.
Gross margin can be calculated by looking at your company’s revenue and then subtracting what you had to spend to earn that revenue. When doing this on a client or project level, your CPA for your content marketing company may look at the following things:
• Travel costs related to the client
• Labor cost/cost per hour
• Equipment rental
• Pass-through or hard marked up expenses
A simple review of your bookkeeping for your content management company should give you an idea of gross/net profit on a company-wide level. However, identifying gross profitability per project or per client requires regular detailed accounting. Fusion CPA offers bookkeeping for content marketing companies that should give you a big picture view of your company’s finances while helping to drill down to address issues on a micro-level.
Foresight Can Save You Money: Tax Planning for Content Marketing Companies
Your marketing firm may need new laptops, new tablets, or new cameras. When tax planning for your content marketing company, you should be strategic when determining when to buy these big-ticket items. Do you need more deductions for this tax year? If so, it may make sense to make your purchases before the year ends to reap the deductions.
If your business is on the cusp of reaching the next tax bracket, you may wish to delay invoicing until the following year. You may have to ask yourself, do I want to spend $6,000 on my business or pay the government $2,500? The earlier in the year you ask these questions.
Eliminate the Hassle of Filing Taxes
Tax rules can be complicated. Before your firm can use the deduction or credit, it has to qualify for it. At Fusion CPA we have a team of content marketing company accounting specialists committed to helping your content marketing firm be a financial success. Let us ease the burden of tax preparation while providing professional tax advice. Our bookkeeping specialists offer services to help you reduce accounting errors and avoid the potentially serious legal consequences that come with them. You can learn more about our services by clicking the button below to schedule a complimentary discovery call today!
This blog article is not intended to be the rendering of legal, accounting, tax advice, or other professional services. Articles are based on current or proposed tax rules at the time they are written, and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.