By Kae Williams, General Manager, Exact Online
It’s that time of year again—2016 planning sessions and New Year’s resolution pitches. It is also the time when many public relations agencies look back at the previous year and make projections and goals for the year to come. The start of a new year can be a stressful time for many, especially as executives look to implement new operating internal procedures in an effort to ensure a successful year.
Most agencies experience various forms of revenue loss, which can cripple even the hottest and fastest-growing firms. One common form of revenue loss is when employees inadvertently “over-service” a client. To help counter this problem, one of the most important (yet sometimes tedious) tasks PR managers can do is to ensure all employees are accurately tracking time spent on client activity. This provides management with an inside view into all agency activity so they know ahead of time when the team is in danger of over-servicing a client and/or exceeding a set monthly budget. It seems like PR Management 101, but with so many balls in the air and clients to service, it’s often challenging to carve out time for dedicated budget checks and balances.
Another prime reason for revenue loss within agencies is high days sales outstanding (DSO), which is a measure of the average number of days it takes agencies to collect revenue once an invoice has been sent out. DSO times show how effective companies are at managing cash flow and are a good indicator of operational efficiency and general business health. The faster agencies transform service/sales into cash, the sooner they can meet necessary expenditures and put the same money to use again. The finance department has to factor in the average amount of time clients normally take to pay invoices and if the agency can survive with potential late payments. Invoice, payment and distribution date are also key factors to consider when thinking about DSO and how it may affect the agency’s bottom line.
With this in mind, below are three steps PR agencies, as well as many other service-oriented firms, can take to prevent significant revenue loss and ensure they meet and exceed year-end goals for their clients.
- Understand what you’re up against: Having PR professionals understand why accurate and detailed data entry is important is the first step in rectifying any type of problem within an agency. Without proper rules and deadlines in place for the data entry process, agencies have the potential to face continued lost revenue and time. When it comes to financial issues, it’s been proven that providing employees with a complete picture of their individual financial impact drives them to perform better. Educating agency professionals about why time entry and data tracking is a key element to the success of the agency is the first step in implementing change.
- Consider the cloud: Once PR pros understand the importance of keeping track of their client activity, agencies should determine a solution that works best for their business needs. For some smaller businesses, Excel spreadsheets or homegrown solutions suffice. For others, a more sophisticated system is necessary. In that instance, businesses should consider managing time and data entry through cloud-based solutions that have mobile offerings so data is available to them anytime and anywhere. With the ability to log data on-the-go, employees will do so more frequently, accurately and quickly, saving an immeasurable amount of time. On top of that, business owners will be happy to say goodbye to late or illegible time and activity sheets.
- Automate processes: Once the agency has determined the best solution for their business, they should make sure they are automating all processes, including sending out daily, weekly or monthly reminders to employees to ensure time sheets are complete as well as project management and expenses. By doing so, extra hours won’t be spent double checking previous work and business owners can integrate time registration and approval with invoicing processes, automatically generating invoices to reduce the chance of hard earned money slipping away.
With the New Year upon us, it’s important not to lose sight of your agency’s goals. Each PR professional plays an integral role in the overall success of the agency and can contribute positively to the bottom line.