There are two ways to recognize results of an advertising agency project, which correspond to two different moments:

• recognition at the time of service invoice
• recognition with the delivery or receipt of the same

Let’s look at advantages and disadvantages of both ways:

Each agency must decide how it will account for the results of its operations: this can be at the time of billing, that is, the result impacts the financial statements when the invoice is issued (regardless of whether the service was actually delivered) or, at the time of actual deliveries (also called revenue recognition).

Option 1: Recognize the result with the issuance of the Invoice

This situation occurs when the accounting of the invoice is allocated to an income statement, without taking into account whether the service was delivered or not.

What is the advantage? Provides accounting simplicity

What is the disadvantage? It may be inaccurate, since what is delivered and not invoiced and what is invoiced and not delivered (deferred) is not considered in accounting terms. This applies to both purchases and sales.

EXAMPLE CASE: If a job (service) for a client is performed in the month of December but is invoiced in the following January or February, the result will be in the year of the invoice date, when in reality the dedication of time or execution of the service was performed in the following period.

Option 2: Acknowledge with Delivery or Reception of the service

This happens when the registration of the invoice is separated from the moment of delivery or receipt. By registering in this way, we will automatically obtain the correct balances at all times.

What is the advantage?: It provides accounting accuracy. The balances at all times represent reality.

What is the disadvantage?: It is necessary to carry out the delivery and reception transactions in the system, in order to be able to account for them.

Professional systems for advertising agencies automate this entire process, making the user almost unaware, since the work is done by the software. The only thing the user has to enter into the software in bulk is the check-ins, and the system will take care of everything else.

Forget about the Excel spreadsheets that your team creates to adjust your results month by month.

What is ERP software for advertising agencies and how is it different from traditional ERPs?

It is a software that encompasses all the needs of advertising and marketing agencies, from ATL or BTL campaign planning, facilitates collaborative work, controls each of the processes and automates all repetitive tasks.

That is, it provides full support for planning, operation and administration: from project management to supplier payment, from customer billing to bank collection reconciliation.

Showing all the information in an analytical way allows you to issue the necessary financial reports accurately, effortlessly and with total traceability at all times. In this case, as each transaction is associated with a project and these are associated with a contract and client, it will be possible with a single click to know the status of each job, both the income statements and the comprehensive accounts. All information online, with any device and at all times.