Top 10 ways to ensure financial compliance from your agencies
November 15, 2011
With increasing pressure on budgets and expenditure outside of the retainer such as production the prime area of incremental revenue creep for agencies, it is important that there is a rigorous, but not onerous, process to ensure financial compliance from the agency. Here are a few basic steps to achieve this.
1. When briefing a project to the agency, agree on the set-up of the job-costing module that collects the information for billing, to allow analysis between jobs, not just within them.
2. Set up reporting structures to receive the information in a format that allows analysis of data at your end.
4. Ensure that the estimate and/or budget are included in all reporting and within the job costing system to allow variance analysis.
5. Whenever variance to the budget or estimate occurs, ensure the agency provides detailed reasons or justification.
6. Ask the agency to provide regular details on each job, including the stage of the job as a percentage of completion and the expected final cost of each job, including any variation from the original. This enables you to foresee final costs and review your annual spend.
7. The marketing department should manage and monitor each job down to cost type to ensure transparency of information and accountability of the agency.
8. Have monthly meetings with the agency to discuss any over-runs and credits to estimates.
9. Make sure a meeting is held with your Financial Controller to discuss expected future marketing spends and timing of spends. Source approval for on-going marketing activity.
Many marketers find that managing the agency’s estimate and invoicing systems confusing and complex. What has been your experience with being able to manage agency financial arrangements? What has worked for you? Or what is the worst example of poor compliance you have seen?
Why not share your experience here with a comment?