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 optimise 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 you receive an agreed-upon supplier quote.
3. Review software subscriptions and licences
Review all subscriptions and cull the memberships 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. Consider consolidating or investing in systems that will improve workflows, efficiencies and collaboration.
Design agency, Folk, streamlined its processes by investing in a single ERP system, replacing Deltek TrafficLIVE, Xero, and a number of complex spreadsheets.
4. Do not wait until the end of a project to review job costs
Leverage detailed Job Cost Reports available in most agency management systems to monitor and address overruns, reduce scope creep, and minimise over-servicing before it impacts your margin. Don’t have a system in place that can give you that information? Explore Deltek WorkBook which is used by the leading agencies networks around the world to deliver accurate business critical and financial data
Ensuring your staff isn’t working for free is crucial, but if you’ve decided to invest in key clients, track and measure it rather than simply overdelivering.
5. Set realistic revenue goals for the next 12 months
Interrogate short- and long-term revenue forecast figures and set realistic revenue goals for the next 12 months. Foster transparency within your teams, creating internal accountability to deliver to the forecast. Ensure that committed projects are well-planned and delivered within budget.
Encourage your entire agency to adopt these simple strategies as part of their everyday roles. Small changes to workflow and cost management can have a positive impact on short-term agency finances, a crucial consideration in today’s media landscape.
