Keeping Your Marketing Agency's Cash Flow Healthy

Good billing habits are key to keeping your marketing agency's finances in order. But it's easy to make mistakes that can hurt your cash flow. Let's look at five common slip-ups and how to avoid them to keep your agency financially fit.

1.Using the Wrong Payment Terms:

Problem: Applying the same payment rules to every client and project can cause trouble. Small jobs might need quick payment, while big clients might take longer to pay.

Solution: Tailor payment terms to suit each project and client. For small jobs, ask for payment upfront or within 14 days. With bigger clients, be flexible with deadlines to avoid payment delays. 

2.Not checking the client payment habits

Problem: The client is processing the due invoices within 30 days from the actual due date ( this has happened to a few of our customers in the past) leading to 60 days payment terms instead of 30 days.

Solution: Ensure clients understand and adhere to your 30-day payment terms from the invoice date. Communicate clearly upfront and follow up before the due date to confirm receipt and prompt payment. Address any discrepancies promptly and renegotiate terms if necessary to align with your agency's cash flow requirements.

3.Skipping Credit Control:

Problem: Manual invoicing and unclear communication with clients can lead to late payments. Big companies often have specific invoice requirements, adding to the confusion.

Solution: Automate your invoicing process to stay organized and meet client expectations. Make sure your invoices have all the right info and are sent to the right people. For big clients, find out who handles payments and what they need to process them quickly.

4.Forgetting Late Payment Penalties:

Problem: Without penalties for late payments, clients might not feel the urgency to pay on time, leaving you chasing invoices and losing out on income.

Solution: Include late payment fees in your billing terms to encourage prompt payments. Make sure clients know about these penalties upfront to encourage timely payments.

5.Poor Internal Communication:

Problem: Your team might not know when clients haven't paid, leading to wasted time and resources on unpaid projects.

Solution: Keep your team in the loop about unpaid invoices. Pause work on projects with outstanding bills until payments are received. This ensures everyone's efforts are focused on paid work, helping to keep cash flowing smoothly.

Can you resonate with any of the above?

By avoiding these common billing mistakes and following these simple fixes, you can keep your marketing agency's cash flow healthy and your business thriving.