By Lisa Waggoner

Everyone knows that billing makes or breaks the agency. But only the smartest agencies know the real secret: bill fast, bill often, and bill right the first time. While it may seem obvious, billing is one of the most vulnerable parts of the client relationship. It's where a lot of accounts are lost. And it's certainly where the most uncomfortable confrontations take place. That's why avoiding the common billing traps is so important (and, of course, one of the reasons you bought Clients & Profits).

The answer is to bill correctly, consistently, and on time. Most clients don't like late bills, and they certainly don't like surprises. Getting an invoice two months after the job was finished is one thing, but when the invoice is 20% over budget -- well, that's a shock. Either way, your cash flow is hammered. And the more time it takes to be paid, the more desperate you might be to take any amount. Do this and your margins disappear.

That's why efficient, timely billing is critical. It's the only way to assure your cash flow, which means more money for acquiring the new business and the skilled staff you need to grow. It's also one less worry, and helps you to focus on the future instead of worrying about today.

Make it predictable

Successful billing starts from the moment you first talk with the client. If your client knows that you plan your billings in the same way you plan a great ad campaign, then billing isn't a surprise. The trick is to make it predictable. It's perfectly reasonable for clients to know what to expect on their invoices. The most foolproof solution? Estimates.

The first step: signed estimates

The time to nail down the job's costs is before the work begins. Whether you use a lot of detailed tasks or a single project total, the estimate gives the client a good idea of what to expect both creatively and financially. (Avoid the temptation to start the job before the estimate is signed; it's a great way to end up eating unbilled costs when the client changes their mind.)

Since the printed estimate looks like the invoice, your clients are less likely to be surprised at billing time.

Protect yourself with purchase orders (theirs, not yours)

If you're dealing with a corporate account, push them for a signed purchase order. Since many corporations won't pay invoices without a PO number, you're taking a risk by working without one. Even if your relationship with the client is close, a signed PO avoids any confusion about what work will be produced. To speed things up, make sure that the PO process has begun as soon as the estimate has been approved - the accounting gears often move very slowly in some companies.

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