Nicole Solly, Managing Director at Lolly Jar Accounts has been working within the creative industry for over 20 years. In 2010, she started her own company after the realising that many small – medium businesses in the marcoms industry were using inappropriate resources and/or system to manage their agency finances.
With a fully understanding of the advertising industry and its specific requirements, we asked Nicole how Lolly Jar helps agencies with financial expert advice in order to succeed.
Question 1: Going back to where you started. After completing your Bus in Accounting and Management and CPA you have worked with some of the biggest creative agencies, including Ogilvy and WPP. What are the most common issues that you come across?
NS: Using unsuitable systems and finance resources to manage agency finances. Not investing in systems and finance departments at the same level as larger competitors.
Question 2: In your experience, what do you see as the pros and cons between smaller independent agencies and the larger creative groups?
NS:The independents are more agile and efficient however they often don’t look at the same metrics their larger competitors do which limits their ability to achieve growth. Looking at reporting such as job and client profitability as well as salary and rate benchmarking is critical to determining where to focus efforts. Without this it can become lots of effort, and great work, but with no financial gain.
Question 3: Why did you choose start your own company within the creative industry?
NS: I saw a gap in the market whereby many independent agencies were using unsuitable resources to manage their finance department. They were typically either using a bookkeeper who was only able to look backwards at what had happened in the period rather than provide insights into commercial performance. Alternatively, they were using a very senior resource to do the entire finance function which was expensive and resulted in high turnover as that resource was not willing to do the junior//transactional work.
Question 4: Tell us the benefits of outsourcing the financial and accounting aspects of the business for them?
NS: Outsourcing allows the agencies to access industry specialist resources on a part time basis while being able to scale the resources up and down in times of growth and downturn. By outsourcing to subject matter experts, businesses are able to access skills, templates and knowledge not always provided by in-house finance employees. It eliminates the need to pay for recruitment fees every time there is an inhouse finance personnel change. Outsourcing allows for consistent and steady support and being able to access the most suitable person for each task or project from senior to junior.
Question 5: You have developed to a team of 14 people, tell us more them and the way you work with your clients……
NS: We typically work in teams consisting of a finance manager and assistant accountant managing the end-to-end finances of each client from credit card reconciliations all the way through the board reporting. All lolly jar staff are industry trained and come with the knowledge and experience in the way creative businesses work.
Question 6: How does a good system and processes add to an agencies efficiency?
NS: By providing rigour around finance processes to ensure accurate results without having to double or triple enter data in multiple places. Being able to trust the financial results produced is paramount and can be the difference between success and failure as a business. Good system and processes also allow the business to look at metrics in real time rather than down the track when it’s too late to make the decision required by management.
Question 7: When was the first time that you came across Paprika?
NS: In 2013
Question 8: What are the current challenges faced by the creative industry?
NS: Margin squeeze due to competitors undercutting or costs increasing. Pricing right and managing overservicing is key.
Question 9: Inflation seems to be a very high topic at the moment…. What advice would you give to agencies to help them deal with the current inflation and rising cost of staffing costs?
NS: Review rate cards and contracts to ensure any cost increases are being passed on at the right multiple. If providing bespoke or specific services look at value-based pricing as a pricing model.
Question 10: What are the most important Key Performance Indicators to your clients?
NS: Agency KPI’s should centre around staff cost ratio, billability/utilisation and client profitability.