Accounting at an ad agency

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 I am starting a new digital marketing agency which will get money from clients for taking out online ads in their name. 

The money clients pay us for taking out ads is separate from what we bill them for our service charges. Obviously, the ad spend amount cannot be counted as our revenue. Our service charges are our revenue. 

How should we account for the ad spend money received? 

Though this question is in the accounts category, Any additional information about how to handle the tax/filing aspect will also be much appreciated. 

Replies (1)

I’m not sure about taxation for services, probability every revenue is taxed...

next you can show the ad money as revenue because you know transaction price is charged through ‘ cost plus and a margin method’ so everything is a revenue, don’t be surprised because when start a company, you will incur operating expenses and they are covered through ad spent + service charge. You can disclose this information in the revenue schedule in the statements.


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