Easing the burden on agency finances is a priority for most agencies at the moment. We take a look how small changes can have a positive impact and optimize agency finances.
Like many agencies, you may be grappling with some big decisions at the moment. Whether to concentrate your efforts on pivoting your business model, taking drastic cost cutting measures, or choosing to invest in people or technology to survive. But there are also some simple things you can do right now to optimize agency finances and allow you to navigate this volatile market.
1. Send out invoices as soon as possible
Don’t wait until the end of the month. As soon as you hit a milestone, have delivered the agreed percentage of work, or have completed the project – send out that invoice!
Getting paid days or weeks earlier can have a significant impact on cashflow when business is slowing.
2. Create POs as soon as you have an agreed supplier quote
Finance departments can better manage provisions for payables, if you create purchase orders as soon as possible.
3. Review software subscriptions and licences
Cull what subscriptions and licenses you don’t need. Many of today’s subscription services will refund you for pre-paid months so you will see an immediate benefit. Also, think about consolidating or investing in systems that will improve workflows, efficiencies and collaboration.
4. Do not wait until the end of a project to review job costs
Most agency management systems feature detailed Job Cost Reports. Allowing you to monitor and catch overruns, reduce scope creep and minimise over servicing before they eat up your whole margin.
Now more than ever, you can’t afford for staff to be working for free. On the flip side, if you have made the decision internally to invest in key clients, this should be tracked and measured rather than simply overdelivering.
5. Set realistic revenue goals for the next 12 months
Interrogate your short and long term revenue forecast figures and then set realistic revenue goals for the next 12 months. Be transparent with your teams and create accountability internally to deliver to forecast. Make sure committed projects are well planned and delivered to budget.
Get the whole agency onboard and brief teams to do these simple things as part of their everyday. Small changes to workflow and cost management can have a positive impact on short term agency finances. Which, is especially important in the current climate.