There is quite a symbiosis within any agency. Sales cannot function without a creative team to produce the work they’re selling. Management would not exist without someone to, well, manage. And finance would be out of a job if sales weren’t bringing in new business. Come to think of it, everyone would be out of a job if any of these departments didn’t exist. It can be easy for a creative or project manager to forget about the other departments within the agency. Just because you aren’t constantly aware of it though, doesn’t mean that it’s not important. Without a finance department, many critical functions would be left undone, and the agency would eventually fall apart. While not completely inclusive, here are a few things to remember when asking “What does the finance department do anyway?”
What does the finance department do in a company?
Reporting
This may be a little less ‘magical’ than some of the other financial responsibilities. Revenue and expenses are reported. Reports on taxes paid and taxes due, any market indicators, etc - these all fall on the finance department to take care of.
As a project manager, accountants can be your best friend when you need to gather data for your own report. When your boss asks how the big customer account is going, you can proudly say that your expenses stayed constant despite bringing in another 25% in revenue. And then silently thank the finance department for their help in turning “I am pretty sure we are doing better than last year” into hard facts.
Outgoing amounts
Any expenses or debt is controlled by the finance department. And payroll is included in there too. It all needs to be documented and assigned to the proper area within the company budget, which can include each ongoing project. Then, anything project-specific will also be reallocated to the proper line item.
If you are paying close enough attention, you’ll see each area that your project is spending on, and make sure that it is assigned the proper accounting code. If not, you may wind up with a bunch of charges that you will need to do a deep memory search on when you’re trying to figure out where exactly it belongs.
Incoming amounts
Just as any expenditures will come to the finance department, so does all of the influx. The revenue that is generated by completing your projects successfully will be received by the finance department. It’s then - again - up to them to determine which budget area it needs to be allocated to. It wouldn’t hurt for you to confirm their acceptance of the proper amount either.
One important function within the revenue acceptance is their anticipation of future amounts. This can also be an important part of forecasting, as you can use their values to reconcile your own forecasting figures. If you have different amounts, a further investigation may be warranted.
How can Workamajig help you run your finances more smoothly?
A full accounting package keeps you on track & gives you the business insight you need to grow a profitable agency.
- Easily see which clients are your most profitable & where you can improve your margins with flexible financial reports
- Efficient invoicing & integrated billing features are the keys to a healthy cash flow
- Budgeting & chargebacks establish clear timelines & transparent costs
Financial reporting that gets it right
Get all the standard corporate P&L statements you'd expect, plus additional client - and project - P&Ls ready to go. Oh, and a full suite of standard and custom report options.
- Easily allocate overhead by hours, labor costs, or total bill to see true client profitability
- Find your profitable services with the strongest margins & double down on them
- Spot superstar account managers & your best (& most profitable) performers
Efficient invoicing is the key to healthy cash flow and Workamajig makes it a snap.
Generate invoices automatically with details like time, materials, specific rates, and markups.
- Flexible billing options let you see work ready to be billed by time & materials, fixed fee, retainer, or media
- Drill down by project to see time entries for billable work and then review, adjust, transfer, or write off
- Prevent overstated revenue with advanced billings that are automatically deferred