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How advertising agency collect their debt?

Author: Jackson Gilbert
by Jackson Gilbert
Posted: Jul 02, 2020

Advertising and printing agencies constantly worry about outstanding invoices. As they send their invoice mostly after they have completed a project, they have tons of accounts receivables. Now, a delay or two in payment is something any advertising company can handle. But if the client doesn’t pay even after a month of the last payment date, it is cause for worry. It is hard especially for small advertising agencies who rely on customer payments for paying their vendors and employees.

Also, immediate, and timely payment is necessary for an advertising business if they want positive and constant cash flow. A non-paying client account can become a huge debt for you as they can hire you for multiple projects. It is not the right way to handle business, and you need to take strict action against non-paying customers. Here is how an advertising and printing agency goes about its debt collection project.

1. Using an in-house team

An advertising agency has an in-house finance team that is responsible for accounts receivables, business expenses, and pricing models, and so on. They start reminding the clients about their due payment once they don’t pay past the last payment date.

Also, it is their responsibility to ensure they send timely invoices. If an invoice goes out late or is incorrect, your payment will get late.

Unfortunately, not all advertising companies can handle debt collection procedures, especially small startups. For them, it is best to move on to the next step.

2. Hiring a debt collection agency

A third-party debt collection agency is one of the biggest allies that an advertising company can have. They can collect the debt on your behalf saving precious time and money. However, a lot of printing firms hesitate to hire a collector as they fear that they will lose their customers. This fear is baseless. All collection firms follow a strong and strict code of conduct and use ethical ways to collect the debt. They also adhere to rules and laws which ensure that no debtor faces harassment or abuse.

Here is how a collection agency works:

  • They send out diplomatic collection notice or demand letters to the delinquents after every seven to ten days. If they are unable to contact the debtor through the contact information that they have, they use different methods.

  • They use skip tracing methods and stalk the social media handles of the delinquent to find their contact information. Although, since the client of an advertising agency will be another company, it won’t be hard to contact them.

  • If they don’t get any reply from the company, they will meet or talk to them directly. If they are suffering from financial issues, a collector can help them get a payment plan.

  • If they have no genuine reason for not paying, and still refuses to pay, a collector in agreement with the advertising agency can file a lawsuit against the business.

Advertising agencies work on a project basis, and they must get their payment on time to pay the various artists. Also, they need intricate equipment that requires money.

About the Author

Jackson Gilbert is a Blogger. With his skills, he has been helping fellow marketers and brands worldwide. When not glued to his laptop, he can be found making travel plans that rarely happen.

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Author: Jackson Gilbert

Jackson Gilbert

Member since: Aug 12, 2019
Published articles: 56

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