Re: Problem Getting Advertisers To Pay
In response to Jeremy and Chad:
In the past we've found that working with a commercial
lender to pay us after the ad cycle has run seems to speed
up cash flow. Sure, we pay a few points in costs but we get
our money in the bank on day 31 after I have sent out my
invoices and tracking reports.
That way the lender is back paid in 14 days, as the invoice
was sent the first day of the cycle with a thirty day due
date. We build in the cost of the money in our plans as well
as offer a 2% discount to the agencies which pay by day 10
of the cycle. That costs us five points less than the
commercial lender. In some cases the agencies actually do,
but only after we've built up a good relationship with them,
have proven delivery, etc. Our lender loves the relationship
because he gets his money at full rate in half the time
before the rate goes up half a point, meaning he can turn
the cash around (usually to us) and we all pay our bills on
time increasing our ability to do more work. Also the lender
takes on collection responsibility, deals with the agency's
accounts payable team and keep us from being collection
agents. A job which is never fun.
The key to this type of relationship is delivery, validation
of delivery and good clients with great credit worthiness.
Andy Abramson
http://www.spinmarketing.com/
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Received on Tue Apr 06 1999 - 08:54:41 CDT
