It is likely that your SEO marketing company interacts with several clients while simultaneously managing employees and administrative challenges. It can seem like there is not enough time in the day to get done what you need to accomplish. Still, for your SEO marketing company to thrive, you must recognize the importance of accounting.
Without accurate accounting for SEO marketing companies, you won't know if your agency is profitable. A mistake many SEO marketing companies make is putting accounting on the back burner until bills are due. This procrastination can impede future growth. Here are a few accounting and bookkeeping mistakes you want to avoid.
Avoid Having Credit Card Expenses That Are Not Linked to Specific Clients
Bookkeeping for SEO marketing companies often includes keeping track of employee expenses. Expenses can include travel, meals, and certain types of entertainment.
An accountant for SEO marketing companies should be rightly concerned if credit card expenses arrive that cannot be linked to a specific account or to any client at all. Failure to enforce this basic aspect of the bookkeeping for SEO marketing companies could cause uncontrolled spending. If you can’t accurately attribute an expense, it's difficult to gauge a client’s profitability.
Mixing Personal Funds with Business Funds
This is one of the worst mistakes an SEO marketing company can make from the standpoint of tax planning for SEO marketing companies. This co-mingling of funds can happen if:
- Payments from your clients are deposited into your personal bank account.
- You use a business credit card to cover personal expenses and lack the proper documentation.
- Using a personal credit card for business expenses, hoping to get rewards or points.
- Moving money between your business and personal account without documentation. This happens frequently with ATM withdrawals or deposits.
There can be serious legal implications for doing this. For example, if part of your tax planning for SEO marketing companies includes structuring your business as a limited liability corporation, you could lose your liability protection because of “piercing the corporate veil.” This is because you are exposing your personal assets. Even if the consequences are not that serious, co-mingling accounts creates a nightmare for a CPA for SEO marketing companies.
A Failure to Forecast Cash Flow
As an SEO marketing company, clients likely pay you in large chunks sporadically throughout the year. Failure to have your accountant for SEO marketing companies forecast cash flow can lead to serious cash flow bottlenecks.
Including cash flow forecasting in your accounting for SEO marketing companies allows you to:
- Know when you will run out of capital before you do.
- Accurately budget on a monthly basis without surprises and increase flexibility to accept irregular payments from clients.
- Monitor when revenue is being converted in to cash. If your accountant for SEO marketing companies tells you that an expected invoice is not getting paid, this is a problem that should be immediately addressed.
At Fusion CPA, we understand that cash is at the heart of working capital. Not having access to the capital you need can wreak havoc on your business, requiring you to do mental gymnastics to pay your bills. Part of the CFO advisory for SEO marketing companies service we offer is helping small to medium businesses like yours improve their SEO marketing company accounting, tax planning, and financial planning. You can learn more about our services by clicking the button below to schedule a complimentary discovery call today!
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