How to review an agency’s bill

If you’re sitting there thinking ‘I can’t believe this is a real subject’ and asking ‘is this post really necessary….?’ apparently, yes it is.

Discussing an incumbent agency strengths and weaknesses with a client recently, it became apparent that the single thorn in the relationship that was causing excruciating pain was billing. 

Yes. Billing.

And so problematic was the agency’s billing, the client was considering putting them on notice.

Part of the issue turned out to be a centralized billing operation located outside the agency’s office which caused disconnects and confusion between account management and accounting. When the client pushed back, they were given the proverbial runaround to get things resolved which could sometimes take months. 

As weeks and months flew by, the agency became increasingly frustrated with how long the client was taking to pay and the relationship began to nose-dive.  

‘At one point we had six or seven of us gathered around the table, trying to decipher the agency’s bills’ the client said, with a look of exasperation.

So, what to do? First step was to have the agency create a single point of contact – and knowledge – for all billing related questions.  The second step was to create a billing cheat sheet.  And while the one that follows is more generalized, perhaps it’ll help with some exasperating moments you may have experienced with your own agency bills and how best to address them:

‘At one point we had six or seven of us gathered around the table, trying to decipher the agency’s bills’

What was the original ask?

What was your original ask of the agency and has that original ask been delivered to your satisfaction? Clients should be able to clearly delineate between the ‘what’ and the ‘how’ to determine whether the invoice is reasonable and accurate – and not hold invoices back because a project was late or there were mistakes along the way.

Mistakes, late delivery, process or communication improvements all need to be looked at in the context of agency performance, not accounting procedure.

Is this covered under the retainer?

Is the invoice covered under the retainer or is it over-and-above? Your agreed scope of work should confirm whether this is or isn’t the case.  If it’s outside the retainer, is there a pre-approved estimate to corroborate the invoice?  If not, discussion is required to determine how this began without a pre-approved estimate and clear procedures put in place to ensure no surprises next time around.

Are there other supplier or third party costs?

Supplier or third party costs can often be the root cause of an invoice disconnect.  Again, is there a pre-approved estimate for the third-party costs incurred? Are there comparative third party costs to help benchmark what those costs should reasonably amount to?

What changed?

Is there a change in what was originally requested?  Is this a client or agency requested change and is there a change order to support the change?  If there’s no change order but the change is reasonable and justifiable, what’s the value of what changed based on your agreement?

Which pieces of the bill are ok?

Chances are, some things that are included in the bill are ok, so try and break down what’s reasonable.  Identify what’s reasonable and focus on resolving the parts of the bill that you feel aren’t reasonable or don’t make sense.

How is the bill for this project different?

Generally speaking agency costs should be reasonably predictable. If any agency bill is out of alignment with expectations, it may be helpful to understand the role your team played in affecting costs.  If the agency delivered but you requested multiple go-arounds in creative, for example – how could you have mitigated the number of changes and / or how robust is your briefing process that led to the go-arounds?

Benchmark costs for future reference

Sticker shock can often occur when clients don’t know what things should cost.  We frequently here ‘our agency is too expensive’, to which we respond ‘what do you think you should be paying…?’ – and almost always we hear – ‘we don’t know but it should be less‘.  If that’s the case, then it’s likely time to benchmark your costs against market value in today’s dollars.

Billing shouldn’t be a nightmare.  If it is (or even looking like it might be), then developing an agency playbook to help define your service expectations and requirements might be an effective answer to getting – and keeping – things on track.

If you still need help untangling your billing conundrums, ask us how we can help. And save yourself another headache.

Stephan Argent is Founder and Principal at Listenmore Inc  offering confidential advisory to marketers looking for truly independent insight and advice they can’t find anywhere else. Read more like this on our blog Marketing Unscrewed / follow me @StephanArgent

Photo: turbo.beagle

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