Category: Insights

Small and medium businesses are the lifeblood of the Canadian economy. That’s why the government is investing in digital adoption plans to help businesses compete in a global market. Through the boost your business grant program, business owners can receive grants to develop a roadmap for their company’s technology future. This will facilitate an improvement in efficiency, an increase in productivity, and staying competitive in an ever-changing world.

The new program is designed to help companies become more efficient. The goal is to build up process-oriented organizations that allow workers to make timely decisions without needing constant direction. This leads to helping services be delivered more smoothly to customers.

They want to foster a culture of efficiency following the Kaizen methodology.

How this works

The Canadian government wants to provide organizations with the ability to place technology at the heart of their business strategy by hiring specifically designated consultants who can give them analysis and direction on this endeavor. 

Eligibility for boost your business grant is based under the following criteria:

          Be a for-profit incorporated business in Canada

          Have 1 – 499 employees

          Annual revenue between $500K and $100M in any of the past 3 years.

What you get

Eligible businesses can get up to a $15,000 grant towards working with a certified digital advisor in creating a plan. This grant will pay for up to 90% of the cost of this service.

At the end of this service, you will receive a completed analysis on the state of technology within your business, as well as a detailed roadmap to follow with your organizational goals in mind.

Some examples of what you might look for in a plan include:

• Analysis of current technologies and how they can be made more in line with your business objectives.
• Discovering what data can be better visualized for immediate actionable insights.
• Understanding your cybersecurity exposure, steps to mitigate your risks, and better preparation for a security audit.
• What systems and processes are better automated
• What systems are linkable for improved data synergy

With this boost your business grant, you can pay for an IT Director to step into your organization and provide a clear understanding of where you are at, and then mapping out what you need to do to get where you want to be, for a fraction of the normal cost.

Where to start

Businesses who qualify can get started at the ‘Canada Digital Adoption’ website.  First you would use an existing CGKey or sign up for a new one on their website.

From this site, confirm your eligibility to the boost your business grant, then you are given access to their database of trusted advisors. You can search for and select an advisor of your choice to work with. Once your plan has been completed, you submit that plan and the invoice from your digital advisor. You will then get reimbursed 90% of the invoice cost within 30 days of submitting this plan for approval.

Any plans that come back rejected(rare) are looked at by the program and further guided on how to complete them to be in line with the requirements of the grant.

0% Interest Loan of up to $100,000

Once a digital adoption plan has been successfully completed and accepted, businesses are then qualified to receive a 5-year no-interest loan from BDC to help with implementing the strategy.  Businesses with a revenue of $500K to $5M can request a loan between $25K and $50K.  Business with a revenue of $5M or more can request a loan between $25K and $100K.

A business has 1 year to apply for the loan after the digital adoption plan has been accepted.

What can the loan be used for?

• Cloud accounting systems
• Customer relationship software (CRM)
• Digital marketing and SEO
• Cybersecurity
• Dashboards to track key performance indicators
• Developing automation with your finance function
• Hiring expert digital advisors

Students to the rescue!

Furthermore, the government wants to help with implementation of these initiatives by offering subsidies in hiring technology students. Once a Digital adoption plan has been accepted, businesses can request access to a youth placement provider to help the organization find a recent graduate with the skillset they need.  The program can offer up to $7300 in wage subsidies towards this endeavor.

This was a basic summary of the offer from the Canada Government, and the full program guide can be found on their website here.

Argento CPA’s role in all of this

Argento CPA is an authorized Digital Advisor and brings to the table the same care and attention to this endeavor that we bring to our accounting clients.

Your business success is our bottom line.  We’ll work with you every step of the way in this plan to make sure we’re meeting your needs.  We’ll guide you through the entire application process as well as work with you step by step to clarify your digital roadmap.

We have the experience that can help with not only automated accounting systems, but information security, network configuration, cloud application configuration, automation, and a variety of other technologies.

Contact us today to see how we can help get you started!

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Taking the same approach to accounting for marketing agencies as you would for any other type of organization might not be the best path. You wouldn’t want your client’s marketing strategy to be all over the place, would you?  As an agency, your strategy involves getting an understanding of your clients’ buyer’s journey, and sales process and you create a strategy to deliver the best results.  Accounting and taxes are no different from that.

Your accountant should spend time upfront getting to know your systems and processes, what you have implemented in the past and discover what works and what doesn’t.  From there, use a custom-tailored approach to get you the results you’re looking for.  Financial clarity on key metrics and automation to save you time.

Key reports for agencies

Profit Report – you want to have 100% financial clarity on your income.  Profit reporting is the basis for some of the biggest decisions in your business.  This report breaks down all your revenues and expenses.  If it’s not accurate, you could be making wrong decisions.  You don’t just want to know your net income either, you need a detailed breakdown of your revenue streams and expenses so that you know exactly what you are spending money on.  With accuracy, you can budget and forecast and compare budgets to actual so that you know if you are hitting your targets or not.  Without this information, you could be making poor decisions to hire more staff, increase budgets for ad spending, and many other key decisions.  

Customer Acquisition Costs – When your profit reporting is accurate, we can determine what your customer acquisition costs are.  This is key to your business’s growth because it tells you exactly how much money you need to spend to acquire new customers.  Your customer acquisition cost is calculated by taking your total sales and marketing expenses divided by the total number of new customers.  In accounting for marketing agencies, your accountant should be the one who reports this metric to you because they should know all these details after reconciling your books.  Our agencies get this metric delivered in their monthly report as a trailing average, so they know whether this number is improving or getting worse over time.  With this number accurately reported, you can move to the next calculation in the value equation and understand your customer’s lifetime value.

Customer Lifetime Value – How much does one new client earn your business in the long run?  If you don’t know this metric, you can bet your competition does.  And they are using this calculation to land more deals than you.  Your customer lifetime value is the average value per deal x # of deals per client x # of years they are your client.  Let’s use an example from the accountant’s perspective.  XYZ Agency engages with us for bookkeeping and taxes for $10,000/year.  The gross margin on this engagement is 50%.  This means our average value on the deal is $5,000.  XYZ Agency has 1 transaction per year for $10,000 and works with us for 10 years.  That means the customer lifetime value is $5,000 (gross margin) x 1 transaction per year x 10 years = $50,000.  Wow!  This client would have a lifetime value of $50,000 with our firm!  What a great client.  Getting to think about customer lifetime value is a key thought process that drives your business growth, because the more you can increase this value, the more long-term revenue, and profits you will earn.  But there is more to it than just numbers.  You need to increase customer lifetime value in other ways, such as client loyalty and other value-added services.  To get someone to stick around for 10 years means there are more reasons why they should do business with you.  You have to stay on the cutting edge of innovation to come up with new ideas on how you can keep these clients around.

Revenue Per Employee

This is a very simple but important metric to calculate.  Take your total revenue divided by the number of employees on your team.  Does this number make sense?  Whether it makes sense or not depends on your goals.  Every business has different targets.  We have seen some of these metrics be as high as $500,000 per employee, down to $150,000 per employee.  It depends on your goals and where your agency lies on the value spectrum. 

Key Automation

We know that you creative agencies out there are tech-savvy.  So here are some aspects of your financial functions we recommend automating when doing accounting for marketing agencies.

Accounts Receivable

Cashflow is the lifeblood of your business.  Make sure you are paid on time by invoicing directly from QuickBooks Online and using the in-app credit card collection feature.  If your repeat customers are happy to pay direct deposit, you could even set up your accounts receivable process using an app like Rotessa or Plooto to save on those pesky merchant fees.  We highly recommend to clients get direct debit payments when possible.  3% of your total revenue adds up quickly!                 

Accounts Payable

Plooto is our go-to app for payables.  The thing we love most about Plooto is it’s reconciliation feature.  This makes matching bills to bill payments seamless and keeps your records accurate and up-to-date.

Zapier

If you’re like most agencies we work with, you are using a CRM or sales app of some sort.  If it doesn’t come with direct integration, use Zapier to connect your apps together so that your finance function is interconnected and removes duplicate contacts/information from your database. 

Dext

Dext Prepare will be your main hub to all expenses, bills and invoices.  It connects with your cloud apps and helps you fetch invoices directly from service providers.  For example, connect your Google, Facebook, and Outlook accounts to Dext, and let the app fetch your invoices directly into Dext.  From there, we take your invoices and match them to your payments in QuickBooks or Xero.  What you get at the end of the day is a hands-off approach to gathering financial information for your accountant.  We accountants love this feature because we don’t have to keep bugging you about invoices, and get can get the info we need with ease so that your records are 100% audit-proofed on the cloud.

These are just a couple of the automations we recommend when doing accounting for marketing agencies, but there are plenty more areas where you could improve your finance function.

At the end of the day, you need to think about how your finance function is automated and delivering you the financial clarity you need to make better decisions.  There is more to bookkeeping than keeping records and audit-proofing for CRA.  The key is to understand exactly what these numbers mean and work with your accountant to create an action plan and grow your business.

Contact Argento CPA today if you have any questions or looking for expert advice on accounting systems setup and reporting on your key numbers.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances

As you’ve probably experienced by now, time management is essential as time is the most valuable asset you possess. And if you’re like most business owners, you’re eager to find ways to maximize your time. 

This is why learning and implementing time management practices is so critical for business owners. 

Here are some of our best time management tips for business owners:

Delegate When Possible

For founders, their business is their baby. And since you likely went through a stage where you did or were involved in every aspect of your business, it can be hard to delegate. 

But the reality is that as your business grows, you won’t have the capacity to be involved in everything. You’ll need to let go and delegate, otherwise, you will become the bottleneck for growth. 

Here are three tips to make delegation a little easier:

• Make a list of things only you can do and delegate everything else to a trusted employee. 
• Spend time training and working alongside the team members you delegate to, this builds your confidence in them and makes it easier to pass things along. 
• Consider hiring an assistant or virtual assistant. By doing this you can delegate all the small tasks you have throughout your day, such as setting up appointments or reading through emails.

Have a Plan to Stay On Top of Time Management

With all the things you have going on, it’s common to feel like you are being pulled in every direction. This is where having a plan becomes a critical business asset. 

Having a detailed plan in place can help you prioritize and check more of your action items off your list, leading to more productivity. This will also help you make business decisions more consistent with your goals since it serves as a reminder of where you want to take your business and what needs to be done to get you there. 

Here are some of the main reasons why you take the time to create a plan. 

• It opens up some of your mental bandwidth. 
  • Since you no longer need to spend energy thinking about what you need to do, you can focus on getting things done. 
• It improves your mindset. 
  • By checking things off your list, you’ll feel more productive and have a tangible idea of how much you are getting done. 
• A plan doesn’t have to be complicated. 
  • You can do something straightforward or even on a week-to-week basis to make it more manageable. 

Eliminate Distractions to Master Time Management

Your time is, without a doubt, your most valuable asset. As a business owner, your time impacts every aspect of your business, which can make any distractions costly.

The problem is that in today’s world, we have dozens of ways to get distracted, and some of those ways can even trick us into thinking that we’re being productive.

Here are some tips to help you eliminate distractions:

• Don’t look at your email all day, or at least minimize the number of times during your day that you check it.
  • Email is handy, but rarely are they urgent. As a matter of fact, email shouldn’t be used for anything urgent. So responding immediately will simply take you off task. 
• Ignore your smartphone unless you get an actual call. 
  • Our beloved smartphones have taken over our lives. They can help you be productive, but they are filled with powerful distractions such as social media. 
• Minimize the number of meetings you attend. 
  • Most sessions are often unnecessary and take away both you and your team’s time.

Work During Your Most Productive Times

Everyone has different times of the day where they can be the most productive. It’s different for everyone because it’s determined by personal preference and everyone’s individual physiology.

Working during the most productive time of the day can be the difference between feeling great and energized or feeling rundown, all with the same amount of work. 

Experiment with what are the best times of the day for the different types of work you do on a daily basis. Once you’ve found what works, make sure you block out those times for your work and keep them free of meetings or anything else that may get in the way.

Stay on Top of Your Finances

Your finances are the lifeblood of your business. Staying on top of them throughout the year allows you to know exactly where you stand and provides valuable information for making decisions. The problem is, unless you have a strong financial background, this can be a time-consuming and draining task. 

To ensure you are using your time effectively, turn to a trusted accounting partner. They’ll help you carry your financial load and you can be confident things are being done timely and accurately.

When working with Argento CPA, you will collaborate to identify what your top priorities are and where you should be focusing your time.

Argento CPA is the perfect option for small business owners looking to maximize their time. Visit https://argentocpa.ca/ to learn more. 

With a busy business and not much time to really dive into financials or create a well thought out budget, it’s important you know which reports produce the most value and which provide you with the most insight in the least amount of time.

We’d argue budget vs actuals are the set of reports that deliver this value. When your budget and actuals are closely aligned and working together, you are closer to reaching your goals.

What Is the Connection Between Budgets, Actuals, and Goals?

Your goals are a depiction of where you hope your business will go. These goals should be SMART (Specific, Measurable, Attainable, Realistic, Timebound).

Your budget is an assumption of where you expect to spend your money over a given timeframe. Your SMART goals, industry benchmarks, and first-party company data show you where you’ll need to spend the money and how much to achieve those goals.

Your actuals are your current financials. You have certain expenses that stay more or less the same. For example, as an entrepreneur, you may invest in email outreach software. You know how much it costs every month and can budget precisely for it. Your utility bills also stay roughly the same.

For other expenses, the budget may not stay so steady. Supply chain issues may raise the cost of raw materials. You may find your advertising budget didn’t deliver adequate leads to meet revenue goals, so you have to spend more than you planned. These variances happen.

The better you understand them, the more accurate your budget becomes each year.

All three (goals, budget, actuals) can work together to improve your business. And because your budget is created with your goals in mind, comparing your actuals to your budget will tell you how close (or far) you are from reaching your goals.

Analyze the variance to answer important questions like:

• Am I spending in areas that are increasing revenues?
• Could I perform better in certain areas if I allocated more money to a certain expense?
• Are there areas where I can cut expenses to increase profits?
• Do I have enough capital to run this business or need to seek funding?

What does a Budget vs Actuals variance look like? It may take on many forms and could be positive or negative:

• More sales than expected (good)
• Higher profits (great)
• Missed goals or KPIs (room for improvement)
• Higher expenses than budgeted (you can do better)

It’s important to note that just because variance is positive doesn’t mean you should fail to take a closer look at it. A variance that goes significantly in your favor could suggest you’ve got greater growth potential than you’re giving yourself credit for.

Your Budget Was (or Should’ve Been) Created with Your Goals in Mind

When you do this, your budget leads to more success.

You’ll have:

• The ability to allocate your money more intentionally
  • Write down your goals and prioritize them. Make sure you’re aligning spending with those priorities. That doesn’t necessarily mean allocating more to your top priority but ensuring you’re spending the right amount to meet that goal.
• A point of reference before making big decisions
  • Entrepreneurs are famous for their gut decisions. But when it comes down to it, having the data to back up those decisions helps you pursue opportunities with great confidence and a willingness to follow through with an adequate budget to make that happen. Stakeholders appreciate solid reasoning for decision-making.
• Confidence in the ability to reach your goals
  • Sometimes it takes a little longer than expected to reach a goal, or early indicators suggest you’re not on the right track. During these times, knowing that decisions are based on financial data helps you both see it through and confidently make adjustments along the way.

Your Budget vs Actual Report Gets You Closer to Reaching Your Goals

Your actuals tell you what is going on within your business. They include both what you spend and how much income you generated. The better aligned these are, the greater cash flow you have to work with year over year.

Greater cash flow can do wonders for a business:

• Settle debt early
  • Freeing up more cash
• Return money to shareholders
  • Generating greater confidence in your company and desire to invest in you
• Build a buffer against unexpected challenges
  • Greater flexibility to shift resources
• Lower how much you pay for things
  • Lower per-unit prices by increasing production, paying in cash, always paying on time, etc.

On the other hand, when actuals don’t match your budget, it means there are improvements to be made. Generally, these require an adjustment in either:

• Your spending habits
  • How much, where, when, as well as how you track and stay on top of that spending
• Your budget
  • How you allocate money in your budget to meet your goals

These adjustments help to align your actuals and budget to get you closer to reaching your goals. Regularly checking your budget vs actuals report will help you make the needed changes as time goes on and gives you the chance to look over your goals to see if you are on track.

You can then develop a plan for success by asking:

• Where are you now?
• Where do you want to go?
• What’s the gap (budget variance) you must overcome?

Now, create a plan to address that variance. Track and measure your results.

Consider Working with an Accounting Partner

Aligning your budget with your goals can be tedious, and even when that is mastered, there is still plenty of work that needs to be done to help ensure your actuals are hitting the requirements of your budget. But doing so can deliver significant rewards like increased cash flow, shareholder confidence, and growth.When you work with a trusted accounting partner, they’ll make sure everything is in line and working together the way it should be to see success. If you’re struggling to align your budget with actuals, consider Argento.