I distinctly remember my first boss at Hill & Knowlton telling me Uniroyal was very late in paying its invoices and that I needed to collect the outstanding monies ASAP. ”This makes both of us look really bad to management,” he warned me.
But, before I could pick up the phone, my boss provided some additional counseling. “Come up with a list of day-to-day activities, provide Lynn with updates and, then, at the very end, apologize to her for having to even mention the subject of money, but ask if she'd mind checking on our invoices,” he suggested.
I did as I was told. And, since Hill & Knowlton still exists, I'm assuming they eventually collected those outstanding invoices.
Sadly, though, and judging by the way our staff views overdue client payments, my former boss's POV remains alive and well.
My business partner, Ed, and our CFO, Debbie, are changing that mindset. They have to because, whether it's a lingering hangover from the 2008 market crash as Ed suggests, or some other reason, lots of clients are very, very late in paying us.
That's wrong for a number of reasons. Clients hire PR firms to be their strategic business partners. Partners don't string along other partners when it comes to payment. Further, the best clients realize that an agonizingly slow payment process impacts their image and reputation, as well as their organizations.
I was sitting alongside one of our senior partners when she alerted a client to an unbelievably late series of invoices. The client was not only embarrassed, she actually interrupted the meeting to speak with her counterpart in accounts payable. That's what I call a caring and compassionate client.
Sadly, though, she's in the minority. Some clients 'lose' our invoices. Others claim to have never received them in the first place. And, then there are those who have been instructed by procurement not to pay any vendor in less than 180 days.
We've agreed to tell a few of these tardy clients that we're prepared to stop all work until we're paid. We're also adding 'payment status' to every single reporting chart we use to review a campaign's progress with a client. Last, but not least, we're re-educating our staff on the importance of collections to our agency's health. No one needs to apologize when asking a client to promptly pay their bills. In fact, we're suggesting it kick-off some conversations because it's SO important.
I'd like to see our industry trade press address this issue. It's another one of those uncomfortable realities that plague every agency, large and small, but is ignored completely by the watchdogs that cover our field.
In my opinion, invoicing means never having to say you're sorry.