How Extended Payment Terms May Affect Agency Relations

By Chris Warren

A recent report from the 4A’s doesn’t mince words regarding the current state of payment terms between client-side marketers and their agencies. “The Ripple Effect of Extending Payment Terms” is a full-throated call to action for agencies to only accept 30-day payment terms. “Anything beyond a normal 30-day cycle is incompatible with the typical agency commercial model,” the report says. “Extended billing terms represent a sub-optimal cost allocation of the final product value chain ultimately increasing costs to the consumer without returning any benefit.” But if agencies decide to push back, they run the risk of losing the business altogether.

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Courtesy of Association of National Advertisers