COVID-19 knocked nearly the entire media industry for a loop. How do credit and collection teams cut clients a break, but still collect what’s due their companies?
The business of media advertising is extremely competitive. It can be tricky for a media company to try to enforce payment from an advertiser, even when all parties have agreed to a joint and several liability position. Proper research is imperative for media companies to protect their interests and to avoid a no-win situation.
It seems to be that, outside of an organization’s credit team, no one pays much attention to credit and collection until the economy turns for the worse or there’s a high-profile default. The rest of the time, it’s out of sight, out of mind. Here are seven recommendations on how to remedy that.
In addition to the new demands it places on ad sales teams, selling digital media also requires rethinking the roles by credit and collections departments during the sales process. Tony Pernice, a campaign specialist at Scripps Networks Interactive, explains the company’s comprehensive process for managing digital campaigns.
While a station or station group would never enter into a credit agreement knowing the client wasn’t going to pay off the debt, getting some money at some point is better than none. It’s always better to take a “belt-and-suspenders” approach, and be prepared to go to court in the event credit policies fail to protect against non-payment.
Effective collection is an art form. It can be extremely rewarding for those who apply the lessons they have learned and take advantage of every opportunity to learn from our industry’s experts. Here is advice that will help members of your credit and collections team improve their performance, as well as some general observations that can help each of us step up our game.
Lowering a company’s days sales outstanding can be, well, outstanding. Collections expert C. Robin Szabo describes a careful way of doing it that can really pay off. It involves training new customers, retraining old ones, getting low-spend customers to use credit cards and, if needed, going to court.
Measures such as streamlining and automating much of the credit application process and involving ad sales in ongoing monitoring of their clients’ risk profile have reduced the time required to provide credit approvals and created a transparent and consistent credit and collections process.