I recently received an invoice the other day for advertising that we placed in a performing arts industry publication. I was a bit surprised about a couple of things about this particular invoice.
The first thing that caught my attention was it was being sent via email from my account exec, not an accounting department or an accounting email address. This is not a problem in and of itself, and maybe they want to convey the perception that it’s one point of contact, therefore their advertising account executives are responsible for forwarding the invoice onto the customer.
The second thing that really caught my attention was the invoice was an Excel attachment. And when I downloaded it, it was an actual Excel worksheet that I could manipulate! This one really caught me by surprise because the first thing I thought was “how do they track this thing?”
Lucky for them, we pay pretty quickly. But what about the business’ that might be experiencing a cash flow problem that they sold advertising to? If this never shows up on an aging report, these particular customers may be thinking “well I haven’t heard anyone calling about it, so I can probably put it off another week or two.” And so the cycle begins.
I’m sure the age old adage “Cash Is King” is not new to anyone. Especially small business owners or smaller organizations that don’t have the luxury of being able to tap into a line of credit when needed. And just like the saying goes about sales—A terrible thing happens when nothing is sold—Nothing! It can also be said about program book advertising receivables–A terrible thing happens when nothing is collected—Nothing, as well!
None of your print vendors will be able to be paid, none of your graphic designers will be able to be paid, none of your program book ad sales reps will be able to be paid and on and on until eventually your performing arts organization doesn’t have program books at all!
In a previous post I’ve discussed setting up an invoicing system for your performing arts program book advertisers (Get Paid Quicker From Your Advertisers.) And just like having an invoicing system for your program book advertisers, if you don’t have a system for managing your program book advertising receivables, you will never have true control over your program book cash flow.
Here are five easy steps to make sure you are staying in control of your program book advertising receivables:
1. Use An Accounting Package
This may sound very basic, but you would truly be surprised (or maybe not) about the number of performing arts organizations I come across that are keeping track of all of their program book ad revenues in Excel, or worse–Word! Even if you don’t use all the bells and whistles in the accounting package, you will at least have the capability of running an aging report to keep on top of your program book advertising receivables.
2. Dedicate One Person To Your Accounts Receivables
Ever hear the saying “too many chefs in the kitchen”? This is the same for your receivables. By having one person dedicated to this task, you have only one person to hold accountable.
3. Correspond From A Centralized Accounts Receivable Email Address
By having a dedicated email address, all your correspondence will be in one place. You can easily search through this email account should something go missing, and can easily pull up past history on any one account should you need to retrieve it.
4. Dedicate Every Wednesday To Your Aging Report
Wednesday is the best day to call past due accounts for a couple of reasons. The first reason being that you are most likely to get in touch with the accounts payable person on Wednesday. Why? Nobody takes a day off in the middle of the week unless they’re sick. Second, if they tell you they are putting the check in the mail “today”, you’re most likely to receive it by that Friday or at the latest that Monday.
5. Keep Meticulous Notes
What sounds more professional?
“Hi, I may have called you before, but I’m checking on the status of your open invoice”
“Hi, I spoke with you on “specific date” regarding “specific invoice number” and you said you were cutting “specific check number” on “specific date.” We still have not received this, so I’m wondering if this was indeed sent. Can you please advise?”
This automatically tells the person on the other end that you are keeping track of all the collection attempts. Also, you will need to have very good notes should any of your past due accounts go into collections through a collection service or an attorney.
Staying In Control
By having a system set up for your program book advertising receivables, you will be in control of your cash flow instead of your customer being in control. And I don’t care how great you think your performing arts organization may be, you will always have program book advertisers that will string out their terms as long as they can. Good selling!