Digital Marketing Agency - What Accounting Practice to follow


Digital Marketing Agency Accounting Practices

In business, the one who is successful is the one who follows the trends of the market and the needs of customers and adapts to them in time.

An online business like a digital marketing agency may use various interaction methods with customers; many sellers generally the old brick n mortar physical setup. It is costly, and the overhead takes away from the bottom line.


To make it as easy as possible for the buyer to access the product, the choice, and the purchase process itself, the seller generally creates a website on the Internet. A setup like this has several obvious advantages, both for the customer and the provider.


  • There are no unnecessary expenses (rent of premises, utilities, hiring personnel, etc.).

  • Managers for work can be hired anywhere globally; they can efficiently work remotely, having only access to the Internet.

  • There are no intermediaries.

  • Wide range of payment options.

  • Advertising. The site can be promoted on social networks, on thematic resources.

  • Access to a complete circle of buyers.

The supplier usually delivers the goods in several ways: by its own or third-party service, by couriers, by regular US mail. In this case, the delivery cost can be included in the price of goods or stand out as a separate service.


A private person can create an online store. Yet to fully protect and separate your assets from the business assets, you must create a corporation. Whether it be an S Corp or LLC, it is essential to set up your business from the beginning properly.


There are a few things to consider from an accounting perspective when setting up your books.


For example, if we use the Digital Marketing Agency example again. You will need to define a few things for the business

  • Service Costs such as software, internet, etc.

  • The Simple Goods and Expenses - everyday industrial items, dishes, crafts, small, inexpensive electronics, clothes, mobile phone accessories.

  • Goods and expenses for which there can be claims: something that can cause harm to health (for example, perishable food), expensive goods with a warranty period (expensive electronics, etc.).


Generally starting, I recommend the simplified taxation system. It is much easier to keep track of; you can use the online services of bookkeeping or small firms. Online accounting sources like QuickBooks and Xero are popular and can easily do the job at a low cost.


There are two simplified systems:

1) Income minus expenses - You have the right to deduct from the income received the cost of goods, expenses for the Internet, website development, delivery, etc. From the resulting profit, and pay the federal rate of tax and/state tax if required.

2) Income - You will pay tax on all amounts received by you. No expenses can be deducted from them. It is generally the case with an LLC if it is not set up as an S Corp LLC. All income automatically moves to the owner and is taxed at the personal income rate versus a business or payroll tax rate. It is something you want to avoid.

You have started online sales. What documents should an online store issue?


1. Invoices

2. Sales transactions

3. Travel expenses

4. Educational expenses

5. Any office expenses

6. Car Mileage

7. Interest from business credit cards and business loans

8. Bank fees

9. Online platform fees


The list goes on and on. It makes sense to sit down with your CPA and go through the list of expenses you can qualify for before conducting your first business filing to the IRS.

Once you get the hang of it, it is not hard to keep your books in check. Once your business grows above $250,000 in revenue, it is time to invest in a bookkeeper

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