Invoices Made Easy

One of the least enjoyable components of the agency relationship can be the invoicing process - on both sides of the table. However, like many aspects of the agency relationship this can be easily improved and streamlined by establishing an open dialogue and clearly communicating your preferred format, timing and content for invoices. Every client is different in their preferences and most agencies will work within their systems to meet your requirements.

As a general rule, invoices should:

Be on budget and reflect the written plan - For example, if you've approved an agency estimate of $2,000 in fees the invoice should be for $2,000 in fees plus taxes and out-of-pocket expenses or whatever was agreed to. If the budget was quoted in three parts - say event management, media relations and website development - then on your invoice it should keep that same format and accounting so you can easily review the invoice and compare against the original budget to confirm its accuracy.

Be issued on timely basis - Most agencies issue invoices at the end of the month - and/or at the end of a project. If you have certain invoicing requirements (e.g. if you need to receive all invoices by a certain date or if the PO expires on a certain date, etc.) let your agency know and they can probably adjust their invoicing processes accordingly. And on the timing front - let your agency know what your actual payment terms are. It can help save time and frustration for both parties if you let your agency know that your accounting department typically pays in 60 days - so they're not counting on a cheque in 30 days and they can arrange their invoicing timelines as required.

Include a budget reconciliation if appropriate - For my clients with multi-project, annual budgets - or even large and complex single projects, I create and provide monthly budget reconciliations to track and stay of top of the hours and out-of-pocket for my account management purposes. For large, ongoing, multi-project budgets I believe monthly budget reporting and reconciliations are essential to keep the project on track and identify any potential issues as early as possible. If you want your agency to create and update a budget reconciliation all you have to do is ask and many agencies will do this for you as part of their administrative/account management work. This will help you to see where your budgets are being spent on a monthly basis and help you determine where to make changes and re-prioritize as you evaluate your PR program and budgets throughout the year.

Track status of retainer budgets - Although some agencies treat retainers differently, for the most part, most agencies set up retainers to cover ongoing work throughout the year. It's one approach to managing the budget - so you know that every month you'll be paying out a set amount although the activity levels will likely vary from month to month. To monitor the actual activity levels, your account manager can track the actual time spent each month - and that way you'll know if one month was heavy on activity - then the next month will need to be a little lighter, or vice versa.

Include detailed service summary - I'm a strong believer in detailed service summaries to accompany the invoices detailing all the activities performed in that month. One of my client friends says that his invoicing benchmark is that someone not involved with the project should be able to look at invoices and know what was done for the that month's budget and understand the value. I absolutely agree with this evaluation criteria and believe that it helps everyone to better understand the value that was generated during that activity period - to better understand the successes and areas for improvement next time.

While the invoicing process might never be one of the more enjoyable aspects of managing (or working at) a communications agency, by establishing an open dialogue you can help to expedite the invoicing process and use it as a tool to regularly evaluate and improve the value you receive from your agency.

Published in PR Canada in 2005