Enth Degree

Would you pay money for a product you haven’t recieved?

2.02.2015

News & Insights

All marketers need to understand the implications of this unacceptable accounting practice and identify how much it is costing.

The value identified through a simple invoice review can uncover tens of thousands of dollars of your media spend. 

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Media Suspense Account – What is it

Unreconciled credits, the difference between what the client has paid and what the   media company has invoiced, are put into a ‘media suspense’ aka ‘media hold’ account.

  • Newspapers, TV stations, outdoor companies don’t always get their invoicing 100% correct.
  • Not all spots will appear as planned on a TV Network,
  • A newspaper may place your ad correctly as booked on page 5 but fail to invoice your media agency for the additional page 5 position loading,
  • A radio station may put your ‘live read’ spots to air but fail to invoice your media agency for the live read talent.

The media agency has, quite correctly, invoiced you for the page 5 loading and the live read talent fees as planned, but a corresponding invoicing error has been made by the newspaper publisher or radio network.

These un-reconciled credits can be placed into an agency ‘media hold/suspense’ account to accumulate.   At the end of the financial year when the newspaper has still not realised its error, the ‘media suspense’ credit could be posted to the media agency’s general revenue.

Our media agency reviews have revealed that about one in three Australian media agencies run suspense accounting systems.   Some clients may have stopped this practice and claimed the credits, however some have no idea how much is at stake.

What to do about it…..

While we can’t expect media agencies to take responsibility for media company invoicing errors, it should be the client who is holding the money.  After all, it’s your money.

How to spot it – you can spend time looking at your last 12 months of media invoices, or we can do the hard work for you.  For example, we know that if you can’t see a single credit detailed as “not charged” this could be an indication of a “suspense account”.

A well worded contract will give you the right to reconcile the amounts invoiced by a media agency to the client company, against the amounts paid to the media companies.

The amount identified can amount to tens of thousands of your total media spend – delivering an additional acquisition campaign or budget savings!

Action Points….

  • Do a quick examination of your media invoices, do you see regular credits for “not charged” media spots?
  • Review your media contract to determine if you have a carefully worded “right to audit” and transparency media accounting and credit process
  • Contact us – we can provide appropriate wording for media contract input. We also have a process for identifying and managing a suspense account to ensure you get the most for your marketing budgets!

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