Good question, right? Why do you need to have a media agency that is meticulous with media payables, whether they pay media directly or batch media invoices for your accounting department to process? Besides the obvious credit rating benefit, it also keeps the agency and your company in good standing with media to insure no snags when asking media vendors for credit on the next buy.
Paying media bills on time is always a good idea. And it takes commitment from your agency, your payables department, and you. But what if your agency of record has a cash flow issue and extends media payables to help out in a crunch? What about the agency that regularly extends out their media payables as part of their cash flow plan? Not so good. As a client, you are trusting that your agency is quickly passing your media payment through to media vendors.
Media vendors are key suppliers for your company and should be considered preferred vendors. If you get calls from your agency inquiring about media payment, consider that a good sign (provided they aren’t practicing the aforementioned activities). The whole process from the vendor creating the invoice, to them actually receiving payment, likely consists of several steps. So it’s good to keep the process moving along. To get a grasp of a likely procedure let’s look at a hypothetical step-by-step, if the advertiser is paying invoices, in this case for a radio station:
- Media runs
- Radio station invoices for spots run
- Agency receives invoice
- Agency reconciles spots to their order
- Any discrepancies with spots or billing amounts are resolved
- Payment amount is approved
- Invoices for the period (usually monthly) are batched and sent to advertiser
- Marketing director approves invoice amounts, matching to a departmental budget
- Invoices processed by advertiser accounting or sent to corporate office
- Payment issued to media vendor
- TV station receives payment
Kind of a lengthy process…and with many publications billing a month in advance, broadcast billing at the end of the flight or end of the month, and digital billing the month after the flight, things can get tricky when your accounting department wants everything batched monthly. If you are paying media invoices, set a reasonable monthly due date for your agency to submit batched invoices, and then hold them to it. Next, run those to accounting and check it off your list.
Agencies that stay on top of vendor aging reports and are proactive at calling you when payments are missing or delayed, will get a good flow going with your accounts payable department. And your agency should realize that staying on top of the payables will drastically cut down on lengthy payables discrepancies down the road for all parties. The last thing you want is to be in the middle of a paperwork mess between your agency, your accounting department and the media vendor. Yuck.
In summary, when selecting a media agency or reviewing your current agency, it’s important to make sure you are dealing with a company that has a commitment to excellence through the entire media payables process. You will definitely feel the benefits, along with your accounting department. And your current and future relationship with important media providers will be strengthened in the process.
McCulloch+Company is an advertising media services company that integrates the innovation of digital media with the strengths of traditional paths. Founded in 1984 and located in historic Roswell, Georgia, McCulloch+Company is regarded as one of the Southeast's preeminent media agencies. The agency is skilled at managing B2B and B2C clients in a multitude of industry categories. Click here to contact us for a free media plan evaluation.