Top 3 Reasons to Audit Your Agency
Luke Miller, CEO/CCO – Moment Creative
I have been in this industry long enough to “see some things.” I have seen the beauty of this industry and I have seen the beast of this industry. Having worked for dozens of agencies, whether in-house or freelance, I have seen the characteristics that make them all unique, or, for the sake of this article, the characteristics that make them all the same. Surprisingly, it’s the evil side of the industry that serves as the tie that binds and it’s truly a stain on the amazing things we do, can do, and will do. Imagine if honestly and collaboration lead, instead of deceit and competitive profiteering.
So without further ado, here are the top 3 reasons you should audit you agency:
- Your agency is burying costs/marking things up
That $120 thingamajig is actually only $100 and even if it seems like a small, innocuous amount, it is incremental income. It’s small enough you’re unlikely to ask about it, but it’s big enough to matter when it starts piling up. Easy way to stop these things from happening: ask for receipts. You don’t have to comb through every single receipt on all the projects you do together, because the prospect of a random receipt request is probably going to keep them in line.
- Your agency is billing more than they should
Aside from the buried costs in each line item, it’s highly likely that your agency is billing for as much as you will allow. If you open a PO for $50,000, and you don’t audit projects, what incentive does any agency have to not bill for as much as possible. If you aren’t asking questions and money is on the table, guess what these agencies are doing? They are splashing the pot and raking in every dollar you allow. Easy fix: ask for receipts.
- Your agency is billing for more time than is actually spent on the project
This is basically the same thing as above, but on soft costs instead of hard costs. If it took them 14 hours, they are billing for 22. Easy fix: ask for time sheets. Now, this one is a little less cut and dry than hard costs, because hard costs are external and should have an external receipt to match. Soft costs, like labor, are easily falsified. The best way to audit soft costs is to use multiple agencies on your work. Then you have an ongoing comparison basis to say, “well, Agency X does these kinds of things in 15 hours, while Agency Y does these kinds of things in 20 hours.” If the work is tit for tat, now you know who taking more than deserved.
Ok, we get it. Some of these relationships serve under the guise of “don’t ask, don’t tell” and
“you scratch my back, I’ll scratch yours.” Sometimes, at the end of the year, brands just need to dump money so their budgets don’t get slashed. At the end of the day, your happiness with the project is all that matters. So, if you like what your current agency is doing, by all means stick to them. Just know that you might be able to get more bang for your buck if you did two simple things: audit your agency regularly and competitively bid projects. What’s the worst thing that happens? You get more project for less money? The work is better? The results are stronger? I see no way auditing or competitively bidding could possibly yield negative results. Keep your people honest: audit your agency and bid your projects.