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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.

Protect yourself with purchase orders (theirs, not yours)

If you’re dealing with a corporate account, push them for a signed purchase order. Since many corporations won’t pay invoices without a PO number, you’re taking a risk by working without one. Even if your relationship with the client is close, a signed PO avoids any confusion about what work will be produced. To speed things up, make sure that the PO process has begun as soon as the estimate has been approved —the accounting gears often move very slowly in some companies.

Next, 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.

An invoice every day

Many agencies wait way too long to send the bill. That’s an expensive decision because the more time that passes between completion and invoicing gives the client more time to look for problems. Also, billing a client while the job is still fresh in their mind can avoid confusion. You won’t have to spend so much time (unbillable, of course) explaining again the project from memory.

The “auto-billing” feature makes it easy to automate invoices. When used with billing status codes, it automatically invoices a client’s unbilled jobs in a single step.

Lots ‘o Invoices

In some cases, you might not wait until the job is done to make your first invoice. By progressively billing jobs, you can invoice for the work completed to date. Clients & Profits tracks progress billings automatically, so you’ll never overbill or underbill a job. Billing as-you-go means payments as-you-go, which means less float.

And don’t forget to bill the estimate, if possible. Smart agencies pre-bill estimates to prevent cash problems as the job is completed. (Clients & Profits makes it easy to bill any percentage of the estimate instantly, too.) It might even be easier for the client to pay bite-size invoices, rather than one L-A-R-G-E invoice at the end of the job.

Client retainers are another secret for improving cash flow but most clients won’t bite. A retainer is a negotiated fee that covers account service and creative time for the month’s work (kind of like a budget), with expenses billed separately. Retainers are great for agencies, since they know a certain amount of money is coming in every month. However, negotiating a retainer (especially a renewal) is treacherous. For the agency, you need to really know your costs—or else the retainer might not cover all of your billable time.

What account execs need
to know

Don’t forget to keep account service aware of their client’s billings. AEs can smooth out the billing process by communicating with the client before misunderstandings become confrontations. For example, if the invoice isn’t going to match the estimate, the AE can hopefully soften the news before the invoice arrives. It’s a good idea to have the AE follow up on an invoice, making sure there’s no confusion or questions that can delay payment. Then, if corrections need to be made you can do them immediately—before the invoice is way past due. Clients & Profits prints client account agings showing each AE’s unpaid invoices, so that they can help with collections on their clients.

Stop the madness

With a smart, efficient billing system like Clients & Profits, being able to rapidly bill clients is possible—and very easy to do. With a little planning, the trauma of a painful billing cycle can be finally broken. It’ll be a faster, easier process that quickly gets you where you want to be—in the money!