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Marketing Agencies Association urges clients to stop 'greedy and unfair' payment terms


By The Drum Team | Editorial

April 19, 2012 | 2 min read

The Marketing Agencies Association has issued an appeal to clients to call time on 'greedy and grossly unfair' payment terms.

The organisation claims that payment delays from clients are pushing 'to the brink' small to medium-sized agencies that frequently undertake project work.

According to the MAA some 72% of agency income is project based and, anecdotally, the body claims that some payment terms have increased in recent years from the standard 30 days to 120 or 150 days.

Scott Knox, managing director of the MAA, said: “We are increasingly hearing from agencies dismayed at clients’ payment terms, which have crept up from 30 days to 90 and then to 110 and 120, and even 150 in some cases. This is nothing short of unfair and greedy.

“We are seeing the worst payment terms in history and it’s been allowed to go on unchecked. There’s a large percentage of the industry that, unlike the bigger retained agencies, can’t absorb such punitive financial punishment. With cash flow more precarious at smaller agencies, exceptions need to be made and a stop put to these inexcusable bad habits”.

The MAA says that although many client/agency contracts have a late payment clause, most agencies are reluctant to invoke their rights for fear of offending their non-paying clients.

Knox added: “More agencies need to charge their clients for late payment or at very least put their intention to do so in writing, without worrying about negative consequences to their business."


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