The Faster You Invoice, the Faster You Get Paid
As an agency, first you’ll determine the scope and price of a project. Then you’ll deliver the work. After that, you expect to get paid… but the money you earned doesn’t come so fast, does it?
Cash flow is the lifeblood of your agency. It fuels future growth, enables agencies to take on new projects and hire new talent, plus invest in the tools and technology you need to stay competitive.
It may come as a surprise, but many agencies have trouble maintaining a steady cashflow, simply because they aren’t getting paid quickly enough. Somehow, agencies avoid being assertive when it comes to billing and repeatedly fall into the trap of not being able to forecast their future.
Why, though?
The main reasons:
- You’re focusing on maintaining good relationships with those clients
- Your billing processes are tedious and involve multiple teammates
- You’re busy with delivering other work – and not sending out invoices goes unnoticed
Big brands had a tendency of paying out 60 days upon the delivery of a project. At best, agencies would see their cash a month after their work was done. At worst – you’d get paid up to 90 days after you completed a project.
Many agencies mention that cash flow and expenses are hard to predict at times, and this negatively impacts resource planning and hiring. Now, with the industry’s expertise more in demand than ever, it’s time to get paid faster.
To avoid dry periods, here are a few things to consider and some questions you can ask yourself already today:
- Keep your cashflow a priority. How can you shift your agency’s mindset to keep your cash flow a priority? Who do you need to talk to within your team to make sure you’re doing what’s best for your business?
- Avoid being out of sight and mind. Can your team be more transparent about billing from the start of a project, break billing down into phases? Could you consider sending recaps of delivered work on a bi-monthly basis?
- Reevaluate and streamline your billing process. Does your billing process need to be optimized, can it get more automated? Are you lacking the toolset to improve your billing efficiency? Some agencies take even up to 5 days per month to gather data from different sources, generate and send out invoices.
By promptly following up with invoices and payment agreements, you’re not only ensuring a steady stream of income – this also demonstrates your agency’s commitment to clients.
