If you’ve read any of my previous posts, you should know by now that we are highly systemized in all of our processes here at Onstage Publications. When looking at any new line to our business, or even trying to improve what’s already in place, we use a quick litmus test by simply asking “could we franchise this?” No we’re not looking to franchise, but we’re simply asking ourselves whether we can make the particular task at hand systemized and easy enough for someone with no knowledge of the advertising and publishing business to be able to sit down and start working right away. If the answer is yes, then we’ve done our job. If the answer is no, then we still have work to do.

Saying this, if you don’t have a good system in place for invoicing your advertisers, expect to continue guessing about when you’ll get paid.

Make sure your billing options are made clear to the advertiser.

This may sound elementary, but you would be surprised how many sales representatives are afraid to talk about money and billing. This is especially true for inexperienced and less trained sales representatives. But the fact of the matter is, if the billing is not gone over at the signing of the agreement, and clearly written on the agreement, you will have problems come time the bill is due. Also make sure that the sales rep is asking about who the invoice should go to and make sure they get that person’s email address.

Enter the invoice immediately.

The old saying “cash is king” could never be truer here. The sooner you can invoice your advertisers the better your cash flow will be. Sure, you’re going to have advertisers (particularly advertising agencies) that won’t pay without a tear sheet or proof of their advertising. But there are advertisers that want to pay right away, and you need to accommodate for these. Get all of the invoices entered into your accounting system right away. For invoices to be issued at publication with a tear sheet, simply put a future dated invoice in your system for these advertisers. By having all of your advertisers entered this way, you will have much better information on your receivables and can then actually start predicting when advertisers will pay. Also it is crucial to have all the information on the invoice for the advertiser so there is no confusion as to what they are paying for (i.e. the size of the ad, is it color or black & white, is it a single issue or a full season, and so on.)

Make sure all the information from the insertion order is on the invoice.

When invoicing from insertion orders, make sure that the insertion order number, the billing address, as well as any other intricacies from the insertion order are very clear on your invoice. All insertion orders have billing instructions and if not followed exactly, you can expect a delay in your payment.

Email all your invoices.

This will cut 2-3 days off your receivables immediately. If the sales representative did their job, you will have clear billing instructions as well as an email address for where to email the invoice.

Allow for online payment.

If the accounting package you use has the capability for online payments, it is well worth setting up this functionality if not already taking advantage of it. You may have to set up a separate merchant account, but it is well worth the little bit of time on the front end that this takes to set this feature up.

Stay on top of your receivables.

Send out first of the month and mid-month statements. By doing this any questions that your advertisers may have had with the original invoice will prompt them to get in touch with you to clear them up to refrain from keep getting statements. Some customers are surprised by the fact that we send two statements a month, but we would much rather have an advertiser call us to complain about too many statements than never hear from them at all. After all, the reason they’re getting the statements in the first place is because they’re past due!

If the statements aren’t still doing the trick, someone is going to have to pick up the phone and call about the problem past due accounts. You will need someone that is not afraid to do this (once again, not everyone is comfortable talking about money.) This person will also need to be very organized. The trick to collection calls is having a set day every week to make collection calls as well as having good notes to be able to cite specific dates with the customer of when you were in touch, or when you resent an invoice. This gives you better negotiating power to get the account cleared up.

When all else fails, establish a relationship with a collection agency.

Ultimately, the inevitable will happen—some advertiser accounts still won’t pay. For these accounts, having a good relationship with a collection agency will do wonders. Here at Onstage Publications we have been using a firm in Holland, Michigan called Voss Michaels, Lee & Associates, Inc. for over 8 years now. They have a collection system in place that if followed properly is very easy to use. You can use a set aging date to start the collection process, or if your accounts receivable person is familiar enough with the accounts (which they should be if a good system is being used) they will know which accounts need to go and which accounts they feel they can collect on their own. With Voss Michaels, Lee & Associates we will do two pre-collect letters spread out over a few weeks, then they automatically go into full service where their collection agents take over the account.

Our bad debt rate here at Onstage Publications is less than 1%, we rarely have to go to the final step of sending accounts to our collection agency, and we pride ourselves on customer service. But you will unfortunately have the 1% that are going to be problems and in these cases it is nice to have a system in place to get these paid. Good Selling!


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