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How To Navigate Accounting Firm Selection

Paul is co-founder and CEO of Literal Humans, delivering high-quality growth strategies for tech-for-good startups and nonprofits.

Running a successful marketing agency is like juggling flaming swords while riding a unicycle on a tightrope—exhilarating but also complex. Amid the hustle and bustle, how well you handle your finances can make or break your agency’s success. Per the Digital Agency Guide to Business Accounting, the typical agency struggles with overdue accounts, incurs penalties due to rudimentary tax filing oversights, and fails to harness the strategic potential hidden within its financial statements.

Overcoming these challenges requires strengthening your agency’s accounting function, but not through the DIY route—it calls for professional accounting services. And when it comes to choosing an accounting firm, it’s imperative to pause and consider how your decision can significantly impact your agency’s growth, stability and overall success.

Having gone through the accounting firm selection process not too long ago, here are some valuable insights I picked up along the way so you can make the path to financial stability and growth a smoother one for your agency.

Assessing Your Agency’s Needs

Before diving into vendor selection, assessing your agency’s unique setup is essential. Consider the maturity of your agency: Is it a startup, in a growth phase, or an established agency? This will help you identify scalability considerations that align with your agency’s current stage.

Then, pinpoint your agency’s specific accounting needs. Do you require basic bookkeeping services or comprehensive financial management? Understanding these needs will serve as the building blocks of your vendor selection process, so get them right from the start.

Price And Budget Considerations

While price shouldn’t be the sole deciding factor, setting a realistic budget is crucial. Evaluate the pricing models offered by potential vendors, keeping in mind that some firms bundle many services into a single package, which can be confusing. Balance cost-effectiveness with the quality of service you expect, and watch out for sneaky hidden fees.

Team Diversity And Expertise

When selecting a vendor, diversity isn’t just a buzzword; it’s the secret sauce. Bringing together people from different backgrounds and with different perspectives and experiences leads to more creativity and innovation. Our agency cares deeply about diversity, so landing on an accounting firm with a diverse makeup was a huge win. It’s not just a value-based position; diversity makes for a better, smarter team. Don’t forget to consider multiple lenses of diversity. A vendor that hires working mothers in Eastern Europe is a great example of broader diversity.

In addition to diversity, inquire about the vendor’s industry-specific knowledge, especially their expertise working with agencies. Cross-functional expertise is also important. Does the firm understand multiple business functions, including marketing, sales, product development and customer service? Do they see the big picture and know how different functions work together to achieve your agency’s goals?

Case Studies And Past Performance

Going beyond expertise, request case studies, client success stories, testimonials and references to get a taste of the vendor’s past performance and track record. Closely assess the vendor’s ability to deliver results, which is vital in the dynamic marketing world.

One accounting firm pick impressed us with video case studies, which spoke our language and showed an understanding of marketing agencies. And then came the “aha” moment—their previous agency experience was a big plus.

Accounting Platforms And Technology

Technology can be tricky to align with a new accounting firm. Their system preferences may not integrate well with yours, and vice versa. Luckily, our chosen accounting firm uses Xero, which saved us from a dreaded platform switch.

Pro tip: Avoid firms that try to convince you to change platforms when you don’t need to. Ask about integration capabilities; you want a seamless fit into your tech stack. And remember, data security and compliance are your silent guardians.

Experience With R&D Tax Credits

In today’s competitive landscape, it’s more important than ever for businesses to invest in research and development. R&D tax credits can help businesses reduce their tax liability and provide them with the necessary resources to develop new products and services.

If your agency undertakes any research and development activities (which is likely the case), partnering with an accounting firm that understands the significance of R&D tax credits and how they work is vital. Assess the vendor’s track record in securing R&D tax credits and ask for client success stories in this specific area. A vendor well-versed in maximizing these credits can result in substantial financial benefits.

Fractional Finance Director Support

From financial planning and business analysis to cash flow management, strategic planning and managing investor relations, a fractional finance director can play a pivotal role in your agency’s growth.

When choosing an accounting firm, explore if they offer fractional finance director services and industry-specific expertise to provide valuable guidance. Furthermore, consider the cost implications and expected return on investment (ROI) associated with fractional finance director support. Finally, make sure that you’re actually getting the fractional FD support you signed up for. A lot of firms claim to offer support on paper only to shuffle you off to junior-level employees instead of being a steady source of high-level expertise. If done right, this role can be a game-changer for your agency’s financial strategy.

Vendor Evaluation

Creating a vendor shortlist is the next step. It’s about more than your needs and expectations; value matching also matters. Key factors like proactive communication and productive engagement with feedback can be deal-breakers. Request proposals from shortlisted vendors and conduct interviews. Also, check references and testimonials to validate vendors’ claims.

Getting Your Accounting Firm Selection Right

An accounting firm plays a critical role in your agency’s success. However, you should not rush the selection process. A thorough pre-assessment of your agency’s needs, values and priorities is vital so you can make an informed decision that leads to a successful partnership with your chosen finance vendor or accounting firm.

Remember, a strategic choice in this area can significantly drive your agency’s growth and stability, so make it count!


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