Bob Wolfe of Outselling Inc. tells Insider that almost all outdoor firms of any magnitude along with their clients and agencies have moved to 4 week billing. Here are the pros and cons of 4 week billing.
Pros of 4 Week Billing
- Higher revenue. A four week billing period means that there are 13 billing periods in a year versus 12 billing periods if you are pricing monthly. This creates the potential for 9% higher revenue each year if your rate stays the same per period.
- Agency Practice. Four week billing is the ad agency norm so your billing will automatically dovetail with agency norms.
- National client practice. Larger clients process paperwork on a 4 week cycle. Billing monthly will confuse them. For national business 4 weeks is the norm. Also, a 4 week cycle allows a large national client to compare apples to apples because other media are also on a 4 week buying cycle.
- More inventory. Having an extra billing period each year allows you to have more inventory for short term clients.
Cons of 4 Week Billing.
- It’s more complex. It’s very easy to bill on the 1st or the 15th of each month. Life is predictable. It’s easy to remember. 4 week billing creates dates which are always moving around. This is mitigated in Quickbooks because the system can bill on whatever period you choose. Apparatix also allows the automatically flexibility to bill for any period you wish.
- Customer resistance. Insider tried moving to 4 week periods a couple years ago and encountered resistance from customers who complained that this was a backdoor rate increase. Wolfe points out that this objection can be handled by diluting the rate slightly when you shift from monthly to 4 week billing.
Paid Ad
