It has been reported by City AM in London that a research division of an agency holding company had received instructions to “slow down” payments to creditors in order to maximize its “cash position reported in the year-end accounts.”
All the more reason that advertisers should seriously consider moving from the industry’s antiquated “Estimated Billing” system to one predicated on final billing, based upon an agency’s actual costs. Remember, the money that the holding companies are clinging to when taking suppliers out on days payable outstanding belongs to advertisers.
Good treasury management practice would suggest that an advertiser would be better served by retaining their funds longer, maximizing interest income opportunities and eliminating risks to their reputation (and the associated pricing premiums) associated with being labeled as “slow pay” by the supplier community … Read More