Trust but Verify: Hidden Marketing Losses

Invoices and ReconciliationsIn the marketing world, talking about billing procedures, reconciliations, and understanding billing software, are some of the least sexy topics imaginable, but for all business people, getting what you've paid for, correct invoicing, and reconciling expenses is critical. Most digital marketing companies require payment in advance for their services. There are some very good reasons for why they do this, but there's one hidden flaw in the way many digital marketing providers invoice clients. Because most of these companies are small businesses, they use relatively simple billing software, which basically just involves entering in the services they have agreed to provide and the dollar amount. That software kicks out an invoice every month for whatever has been entered, whether any of the services were delivered or not.

I want to be clear that I am not inferring that these companies are being deceptive, but rather they may not have the necessary safeguards to ensure that everything that has been promised and prepaid for was delivered within that month. At CFMG we execute a monthly audit, not just of the previous month's digital performance, but accounting for each facet of the digital marketing program that was executed. I have even encountered this problem with very large broadcast companies who have entered the digital environment, but who continue to use billing software which is not meant for delivery of digital services.

If no audit is being done of your digital expenses, then you could be paying for more services than what you're getting, your marketing strategy could fail or your cost efficiencies and ROI could be skewed dramatically. For example: you contract for eight blogs per month at $100 per blog. The content creation company you've hired invoices you at the beginning of each month for the upcoming month. One month, the client goes out of town for two weeks and fails to approve the blogs in a timely manner, so only four blogs get posted. The next month, you get an invoice for $800 for 8 more blogs. Over a series of months, it would be easy to project that the content creation company could be getting behind on the blogs and yet continues to bill you for the agreed amount of blogs. The simple solution is to each month reconcile what was contracted for and what was delivered and then determine if you're going to post additional blogs in the upcoming month or reduce the expenditure, but if you're not tracking each facet of your digital marketing, you would never know the deficit of your marketing activity.

I want to reiterate that I do not believe that the overwhelming majority of digital marketing providers are intent on deceiving their clients or failing to deliver everything as promised. It's just that the invoices continue getting kicked out by their accounting software, irrespective of any issues in delivering that month's services. My recommendation is that when you enter into a digital marketing agreement, build in a monthly reconciliation system so you can flag issues early.