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Media Pre-billing

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3 posts
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Cameron Dawson
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We would like to change our media billing process to pre-billing in 2017.  Does anyone have any hints on how to set that up from a financial reporting standpoint as well as how to "break" it to the client?

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Courtney Palmer
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We are using a software (Workamajig) that has pre-billing built into it and will automatically make the necessary accrual entries.  It will be a lot of work if you have to manually track your pre-billing, but you will need to bill to an accrued liability account and then move the amount out of the accrued liability and into the revenue account in the period that the media actually runs.

As far as "breaking it to the client", I think most clients are reasonable when they understand that you aren't in a position to finance their advertising and you need to collect from them before you can pay the media vendor.  We bill our clients 60 days in advance for media and have rarely gotten push-back (of course, it is much easier when this is explained at the beginning of the relationship instead of changing things up after you have been their agency for a while).

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George Foster
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We bill 45 days out and explain that we bill at ad close (in B2B at least 30 days out) to insure we have money in hand when the bill arrives from the media. Additionally, we pay all our media bills with a credit to take advantage of 10-day 2% percent and then we get the float from the credit card company and millions of airline miles. Only caveat: you have to pay off the credit cards each month.

And when you bill you need to be sure and accrue the net expense.

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