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The
real secret the smartest studios know about success
By Lisa Waggoner
Everyone
knows that billing makes or breaks the agency.
But only the smartest shops know the real
secret: bill fast, bill
often, and bill right the first time. While
it may seem obvious, billing is one of the
most vulnerable parts of the client relationship.
It's where a lot of accounts are lost. And
it's certainly where the most uncomfortable
confrontations take place. That's why avoiding
the common billing traps is so important
(and, of course, one of the reasons you bought
Clients & Profits).
The
answer is to bill correctly, consistently,
and on time. Most clients don't like late
bills, and they certainly don't like surprises.
Getting an invoice two months after the job
was finished is one thing, but when the invoice
is 20% over budget -- well, that's a shock.
Either way, your cash flow is hammered. And
the more time it takes to be paid, the more
desperate you might be to take any amount.
Do this and your margins disappear.
That's why efficient, timely billing is critical.
It's the only way to assure your cash flow, which
means more money for acquiring the new business
and the skilled staff you need to grow. It's also
one less worry, and helps you to focus on the future
instead of worrying about today.
Make it predictable
Successful billing starts from the moment you
first talk with the client. If your client knows
that you plan your billings in the same way you
plan a great ad campaign, then billing isn't a
surprise. The trick is to make it predictable.
It's perfectly reasonable for clients to know what
to expect on their invoices. The most foolproof
solution? Estimates.
The first step: signed estimates.
The time to nail down the job's costs is before
the work begins. Whether you use a lot of detailed
tasks or a single project total, the estimate gives
the client a good idea of what to expect both creatively
and financially. (Avoid the temptation to start
the job before the estimate is signed; it's a great
way to end up eating unbilled costs when the client
changes their mind.)
Since the printed estimate looks like the invoice,
your clients are less likely to be surprised at
billing time.
Change orders prevent finger pointing
Like
the estimate, change orders should be printed
and signed off by the client throughout the job.
Even if the change order is for a creative change
that has no additional cost, it's wise to keep
the client formally updated about changes in
strategy, style, and delivery. Even if you've
been especially conscientious about communicating
with the client, all that is often forgotten
when the bill finally arrives.
Next Month:
"An Invoice Every Day"
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