Late Payment. It’s not smart. It’s irresponsible: The Communications Council CEO Tony Hale issues statement on ad agency payment terms
VoxComm, the new global voice for agencies, has released an announcement on behalf of multiple agency associations regarding advertising agency payment terms.
Statement from Tony Hale, CEO, The Communications Council:
The Communications Council is an active contributor and supporter of VoxComm and, on behalf of our members, endorses the VoxComm global joint agency association announcement dated 19 May 2020.
In Australia, we have so far been spared the very worst of COVID-19 both in terms of infection rates and economic impacts when compared with Europe and North America.
However, in common with our Northern Hemisphere counterparts, we are also experiencing the worrying, underlying trend whereby contracts are being drawn up by clients that include extended payment terms for agency services.
We believe this is unacceptable: no client should ever expect its ad agency to bankroll its business. This is especially relevant during COVID-19, when agencies are having to manage their own businesses and cashflows more carefully than ever.
That said, the current crisis has had a devastating impact on many industry sectors and Australian companies.
It is gratifying to note that the bulk of clients and their ad agencies in this country have been partnering productively to find solutions for businesses who are experiencing genuine cashflow problems.
Strong partnerships will always find mutually acceptable ways to overcome challenges by working together.
However, TCC strongly believes it is an egregious betrayal of trust for any client to deliberately use the COVID-19 crisis as a convenient trigger to delay payment or extend contracted payment terms.
18 Comments
Wow, that’s going to scare those late payers silly.
hilarious, like ad agencies don’t hold onto suppliers payments for months longer than they should, dictate their own payment terms as they please, forcing production companies to bankroll their business. Clean up your own backyard first maybe before putting out the sob story. And, what about putting your staff on 20% pay while they are working as hard as ever on new work for clients that are still paying full price, all under the Covid-19 umbrella, please.
Agree with the cheque’s in the mail
Cheques in the mail – 100% correct.
Completely agree with the above comments. In my experience, most agencies I have contracted for since going solo 5 years ago have been accommodating paying my invoices on 14 days or 30 days, which is the norm.
A few I have done business with however – mainly large multinationals – have terms of 60 days from the end of the invoiced month and even when that period is passed I spend another 2 to 3 weeks via phone and email chasing up payment.
Will that fiscal attitude change in the present climate?
I doubt it.
If agencies want to be treated fairly, treat others fairly.
cheques in the mail = amazing
Ditto to ‘cheques in the mail’. Production companies bankroll jobs. Paying crew on 7-14 day terms is how we secure you excellent professionals that give you and your clients great results. We are not your bank. Our payment terms are our contract with you, not your client. Net 60 days is a totally abusive use of power.
Well said cheques in the mail.
The industry is one crook-beyond-crook human centipede of shitty payment terms, and as an agency-dewller I genuinely empathise with production companies whose woes are further conflagrated than our own.
Being asked by one multinational client who already has O N E H U N D R E D A N D T W E N T Y D A Y payment terms from the E N D O F T H E M O N T H (= up to 150 days in normal circumstances) to “backend” payments to help them during COVID is an absolute joke.
Echoing the comments above. What a joke. I’ve seen first hand that agencies don’t give a shit about paying suppliers on-time.
Holding companies have been the worst in my experience, I’ve had production freelancers berate me in a restaurant 6 months after not being paid.
Many MD’s and heads of finance often practice the dark money arts behind the scenes, sometimes even encouraged by regional CFO’s to do so.
Greedy agencies scoffing at client payment behavior, when they can’t even manage their own, jet-black pot calling kettle black.
Cry me a river…
Agencies here and around the world are the worst payers in any industry bar none.
To be now saying that ‘No client should be expecting an agency to bankroll its client”..hilarious.
It is agencies who have had absolutely no problem asking their suppliers to bankroll them.
Payment terms?…nah, agencies could not care less. Ask any of the production companies that have to play the dumb game of not asking so as to appear as though the 2nd 50% isn’t impacting their cashflow.
And let’s not forget the TV producers who ‘negotiate’ (and I use that term loosely) the bejesus out of suppliers and feign complete ignorance when you complain that your invoice has not been paid some 45+ days after the agreed terms.
Freelance creative? Bet you too have been screwed by agencies who negotiate your daily rate down to the bone then justify it by saying the client doesn’t have much money. Working hours in a day? Nah, as a freelancer agencies expect you to work up to whatever hour they decided it’s time to knock off. I’ve worked in agencies until midnight and only been paid a “daily” rate. Payment terms? You better have rich parents to prop you up in between agency payments because Acc Pay doesn’t care if you have to walk to work or eat 2 minute noodles because you used up the last $$ you had paying bills. Contract terms? I’ve been booked for a 3-month gig when the agency suddenly turns around and say, “oh, that project’s on hold. sorry.” Or they decide to cut short said contract after one month because of X, Y or Z. Seriously.
Ha what a complete and utter joke. There is no other business in the world that pays later than an agency paying the 2nd 50% invoice.
Funny how quick this turned on its head. Completely agree with all the above. Not seeing much rear-guard action from Agencyland to disavow any of the comments either.
Thanks Tony for starting the conversation and shedding light on some possible reasons why production companies must wait so long for payments from agencies. As a production company owner, I’m putting my hand way up to join you in the push to send this back up the line to clients and to finally get some firm, fair payment terms in place for us all.
Couldn’t agree more with cheques in the mail. Agencies have been doing it for years while production companies have to bankroll jobs just to get them started or finished!