Running a marketing agency is no easy task. There are a lot of different moving parts, and if one part isn’t working correctly, the whole business can be in trouble. One of the most important – but often overlooked – aspects of any marketing agency is accounts receivable. In this blog post, we will discuss the top 5 challenges that marketing agencies face when it comes to accounts receivable, and how to overcome them!
1. Difficulty getting paid on time
One of the most common challenges that marketing agencies face is getting paid on time. This can be a result of a variety of different factors, such as clients not having the budget to pay invoices right away, or simply forgetting to send payments. Whatever the reason may be, it can put a strain on your business if you’re not getting paid in a timely manner.
One way to overcome this challenge is to be proactive about it. Make sure that you have a system in place for sending invoices and following up on payments. You can also offer discounts for clients who pay their invoices early.
Another way to get around this issue is to offer payment plans. This way, even if a client can’t pay their invoice in full right away, they can still make partial payments that will help you keep cash flow positive.
Finally, you can also consider using a service like an invoice financing. This allows you to get paid for your invoices right away, even if the client hasn’t paid yet. The downside is that you will likely have to pay a fee for this service.
2. Clients who don’t understand the billing process
Another common challenge that marketing agencies face is dealing with clients who don’t understand the billing process. This can be frustrating, especially if you’ve taken the time to explain it multiple times.
One way to overcome this challenge is to make your invoices as simple and easy-to-understand as possible. Use clear language and avoid using industry jargon that your clients might not be familiar with.
Another way to deal with this issue is to offer a free consultation. This way, you can take the time to walk your clients through the billing process and answer any questions they may have.
3. Unpaid invoices
If you’re not diligent about staying on top of your invoices, it can be easy for them to start piling up. And, if you’re not careful, those unpaid invoices can quickly snowball into a much larger problem.
One of the best ways to avoid this is to set up a system for tracking your invoices. This can be as simple as creating a spreadsheet where you track the date an invoice is sent, the date it’s due, and the date you receive payment. This will help you stay on top of your invoices. Otherwise, it becomes especially easy to lose track and experience cash flow problems.
4. Clients who are slow to pay
One type of client that can be a huge drain on your business is the slow payer. This type of client often takes weeks or even months to pay their invoices, which can wreak havoc on your cash flow.
To avoid being taken advantage of by slow payers, be sure to set clear payment terms from the outset of your relationship. You may also want to consider using an outside accounts receivable management company, which Southwest Recovery Services is proud to offer.
5. Not having a collections process in place
To that last point, establishing a clear collections process is necessary for going after accounts that aren’t just late but delinquent. At a certain point, you’ll need to take decisive action to get paid what you’re owed, or you risk never seeing that money at all.
Of course, the collections process is tilted somewhat in favor of the debtor, thanks to the Fair Debt Collection Practices Act (FDCPA). No worries. Southwest Recovery Services has worked within the restrictions of FDCPA to get clients paid quickly, and we’re ready to take that responsibility off your plate for good.
Running a marketing agency can be difficult, but with the right systems in place, it can be a very profitable business. In this post, we’ve covered the top 5 challenges that your agency is likely to face when it comes to accounts receivable.
If you’re having difficulties consistently getting paid on time, dealing with clients who don’t understand the billing process, chasing unpaid invoices, or clients who are slow to pay, and need a collections process in place, we’ve got you covered. Southwest Recovery Services has a long history of helping clients in a variety of industries – including marketing agencies – overcome these challenges. Contact us today, you will be able to keep your business running smoothly and profitably!