As the New Year arrives, agencies are under tremendous pressure. The past year delivered tremendous uncertainty for the advertising industry. Here are seven steps to position your agency to thrive in the new year.
1. Determine Client Profitability and Distribution
How are your profits distributed? Take the percentage of your adjusted gross income each client represents. In a pie chart, does one client comprise half or a third of the pie? If so, does that make you uncomfortable? To determine client profitability, analyze deeper and measure the profits from each client to gain more valuable insights. Because you are investing time and resources into each client, you want to track the rate of that investment. If some have a much lower profit margin when you consider the amount of time employees must spend to maintain them, you can decide to raise rates for the client. Or, it may be a symptom of needing to improve your agency process.
2. Lower Operating Expenses
Paying for multiple systems is not only costly; it complicates your workflow (more on that below). While experiencing growth, new employees bring software and platforms for their specific needs. Add up the cost of these separate tools and compare to an all-in-one system. If that isn’t enough to convince you, consider how a single integrated system can increase efficiency, therefore lowering operating costs.
3. Streamline Workflow
Take a good honest look at your agency workflow. Is it as efficient as it can be? Agencies that streamline processes can see an increase in capacity and reduction of operating costs. An all-in-one system can help here because Accounting, Project Management and Media are connected. A connected system supports a streamlined workflow.
4. Optimize Labor
Automating repetitive tasks and harnessing the power of an integrated platform can save thousands of dollars a year in FTE costs alone. With the right automation tools, an individual can more quickly and accurately accomplish the same work it used to take an entire team to do.
Automation has the added benefit of eliminating jobs that generate little strategic benefit to the agency. In fact, the jobs that automation eliminates are largely the jobs that clients point to when they talk about how expensive the agency's "overhead" is and why they don't want to pay for it. Automating those roles lowers the agency's operating cost and frees up workable space for billable roles.
5. Reduce Risk
When the Accounting staff uses a separate system, the risk of human error rises dramatically. This is especially true with media, where one mistake can mean a loss of thousands of dollars (or more!). With an integrated platform, there is no need to manually enter billing and other records. Orders can be created from media plans and schedules; billing is generated directly from the orders.
6. Go Paperless
Observe the amount of paper being used during your process. When employees must print something from one system to enter data into another it wastes paper and time (and of course... the possibility of human error). Why not make it simple for them? An integrated system supports a paperless agency. For example, employees shouldn't have to use paper to get internal approval on billing. If draft invoices are still being printed, consider an accounting system with billing approval capabilities. A Billing Approval feature bridges communication between Account Managers and Accounting, automating the process, saving time as well as paper.
7. Be Prepared for Inquiries and Audits
“Every agency of any significant size will eventually be audited, either at the request (or demand) of a client, or possibly as one of the due diligence steps triggered by an investment or acquisition, or any number of other reasons.” Ellen Coulter, President and CEO of Advantage Software.
The impact of an audit is chaos; it throws operations into disarray as employees are pulled off billable work to chase down records of old correspondence and documents, and reconstruct timelines.
But inquiries and audits don’t have to be painful. With an all-in-one agency management platform, documents like purchase orders, estimates and AP invoices can be stored with related records for easy lookup. An integrated communications system ensures that every action and decision is tracked, searchable, and reportable.
Searching for an all-in-one solution that will help your agency thrive in the next decade? Advantage is purpose-built for full-service advertising agencies, creative teams, public relations firms, and marketing firms of all sizes. Almost a thousand agencies use Advantage for Accounting, Project Management and Media. With features like a built-in document management repository, schedules, agile boards and a training video library, it has everything you need to manage your business. We’ve been helping our clients maximize productivity, efficiency and profitability for over 40 years. Find out how we can help you by contacting us for a demo. If you simply would like to learn more, sign up for our free Newsletter.