Spend management for ad agencies: How to help your clients control spend and maximize cash-back rewards

Accounting firms working with advertising agencies as clients understand the complexities of a business driven by creativity. One challenge in particular is expenses. Agencies must keep careful track of expenses incurred on behalf of clients, which can quickly escalate to sky-high levels depending on their scope of work.

Spend management can help. With it, ad agencies can enforce budgets while also adding cash-back rewards for spend like online advertising to their bottom line.

Legacy expense management

Legacy expense management hasn’t changed much since the first receipt was submitted for reimbursement. It’s after-the-fact. Expenses aren’t tabulated until well after they’ve happened, meaning business decisions can often be made on outdated or incomplete financial information. It is also a time-consuming process. It demands following up (sometimes several times) with employees for explanations and documentation, coding the expenses, and issuing reimbursements. Employees may be waiting for up to a month to get the money back they’ve spent on behalf of their agency. In all, it’s a discipline that needs an overhaul — one that can benefit both your accounting firm and your advertising agency clients.

Evolved expense management

The next evolution of expense management combines charge cards and technology to make it proactive. The process starts with corporate cards that are mapped to budgets. Each authorized employee can be issued physical cards or virtual cards that link to variables such as budgets, projects, departments, or people. Limits are attached to each card. When the limit has been reached, the card will no longer accept charges until authorized by the budget owner. This helps to control spend before any money is even spent.

When an employee spends on behalf of the agency, the precoded expense shows up immediately on the spend management dashboard. This gives your client and you real-time visibility into spend. Since spend is captured in real-time on a dashboard, it gives you and your client the ability to monitor budget performance, catch abnormalities, identify trends, and forecast spend for the future. The software syncs automatically with accounting systems like Quickbooks Online, Sage Intacct, and Oracle NetSuite.

Why spend management is suited for ad agencies

Spend management has advantages for all types of businesses, but it can yield advantages uniquely suited for advertising agencies, including:

1. It can combine spend into one system, including spend outside normal expenses like online advertising, website hosting services, software subscriptions, utilities, office supplies, events, travel, and more.
2. It also provides more control over spend, since it enforces budgets and who can spend them. It offers as many physical or virtual charge cards as needed. Your client can create a virtual card in minutes and swap users when there’s a change in account management. For example, they could have a virtual card that tracks each clients’ expenses or multiple cards to address different areas of spending across the same client. This also offers more protection for agencies and their clients, since the same credit card information isn’t shared across multiple systems or types of spend.
3. Capturing data in real time gives ad agencies quick visibility into their clients’ spend totals — even broken down by advertising medium. This makes it much easier to track and report on performance.
4. Your ad agency clients will also appreciate the cash back rewards on their spend1. Instead of relying on individual cards to purchase online ads, they are using cards and spend management software that can provide cash-back rewards for agency-wide spend. This includes the spend mentioned above like website hosting, utilities, and more. The cash-back rewards can add up quickly — especially considering the amount of paid advertising that agencies do on behalf of their clients.
5. Spend management automation saves valuable time through automated rules, virtual card precoding, and integrations.

How to get your advertising agency clients started with spend management

Ready to set your ad agency clients up for spend management benefits? With BILL Spend & Expense, there are no charges or fees for paying vendors.

Start your expense management evolution by reaching out to your BILL account manager or requesting a demo.