In the advertising industry, agencies primarily operate as intermediaries between clients and vendors. This position offers a strategic advantage—by consolidating investments from multiple clients, agencies can secure better rates and payment terms from suppliers.

For example, a client purchasing ad space directly from a media outlet might receive higher costs and shorter payment terms than an agency that negotiates in bulk.

This financial structure makes it crucial for agencies to maintain tight control over invoicing and collections versus supplier payments. The key is ensuring that supplier payments align with client collections rather than financing supplier costs out of the agency’s own pocket. However, many agencies lack the necessary tools to manage these timelines effectively, leading to cash flow issues and financial strain.

How to keep your agency’s cash flow strong:

To help your agency stay ahead and maintain a positive cash flow, here are three essential strategies:

• Track Every Task in Your Campaigns:Ensure that all campaign-related tasks are completed on schedule, allowing for quick client approvals and immediate invoicing. Faster invoicing means faster collections.
• Issue Purchase Orders Only After Client Approvals: Sending purchase orders to suppliers without client approval can lead to financial and legal complications. By waiting for client sign-off, you ensure that the campaign is already in the billing process, reducing financial risk.
• Negotiate Client Payment Terms Shorter Than Supplier Terms: Aim for client payment terms of 30 days while securing 60-day terms with suppliers. This buffer gives your agency time to manage any unexpected delays in billing or collections without dipping into its own funds.

The Power of an Integrated ERP System

The ideal solution for maintaining financial stability is an ERP system that connects all key processes—from campaign planning and task management to budgeting, supplier contracts, invoicing, and collections. With full integration, agencies can monitor timelines in real time, receive alerts for potential delays, and prevent financial gaps that could impact operations.

With Solop ERP, agencies gain full visibility and control over their financial workflows, ensuring they never have to finance supplier payments out of pocket. Want to see how it works? Let’s talk!