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How a kludge can help manage your agency finances.

Definition: A kludge is a workaround, a quick-and-dirty solution, a clumsy or inelegant, yet effective, solution to a problem, typically using parts that are cobbled together. This term is diversely used in fields such as computer science, aerospace engineering, internet slang, and evolutionary neuroscience.

Agency finances and financial systems can get very complicated, very quickly. The data available to analyse can grow exponentially leaving your head swimming and no better informed about the state of your finances.

Now, a good accounting system will solve this in the long term. Set up correctly to reflect how your agency operates it can give the right level of detail to the right people at the right time.

However if your budget can’t stretch to a new accounting system at the moment there are manual fixes that can give you enough information to help manage your Agency better.

An excel sales invoice register can break down your revenue and generate departmental P&Ls. Headcount numbers can give you a simple recovery analysis. Media commission can work out an approximate cost of sales accrual. If needs be a trial balance model can even generate monthly accounts from Sage50.

I’ve used all of the above (with a few others) to give some clarity and direction to Agency finances. My preference is always for a solidly based and integrated accounts and job costing system. This takes some time though and if you need some management accounts by tomorrow you’ll need a well designed kludge or two to get you through.

A word of caution though. I’ve seen spreadsheets that started with the best of intentions but then veered crazily out of control. Be especially careful if they are open to the entire agency.

Luckily for me what to focus on and what the information means and when to move to a more robust system means my role isn’t made redundant by a spreadsheet no matter how good it is.

If you’d like to know more about how I can help your Agency become more profitable with or without a kludge then contact me on simon@novemberfriday.wpengine.com