The advertising industry is expanding, expected to surpass $1 trillion in revenue for the first time in 2024. With this growth comes increased spending, which can amplify the workload of agency accounting staff.
In September 2024, Modern Media Solutions conducted a study, gathering insights from finance decision-makers from 13 leading media agencies to discover how they currently handle invoices and their plans to prepare for future growth.
To learn more about what they uncovered, download a summary of the report. Or read on for an overview of key takeaways.
The Current State of Agency Invoice Processing
Modern Media Solutions found that most agencies are dissatisfied with their existing accounts payable (AP) processes. In today’s media world, invoices are a mix of electronic and paper-based, leading to time-consuming and inefficient workflows.
Agencies primarily rely on legacy systems and manual input for reconciliation, which can be time-consuming and prone to errors. The lack of integration between traditional and digital media platforms can further complicate visibility and data management.
Common Issues in Media Agency AP
In its study, Modern Media Solutions identified common themes surrounding the challenges agencies experience in their AP processes:
Complex and Inefficient Processes: Large volumes of invoices from diverse sources consume significant time.
Discrepancies and Reconciliation: Mismatches between planned and actual media deliveries create frequent discrepancies. This can make reconciliation and multi-layered approval processes even more time-consuming.
Inconsistent Payment Terms: Agencies must navigate varying payment terms and frequencies from suppliers, with standard windows ranging from 30 to 60 days, and extended windows up to 120 days.
Modernization Frustrations: While agencies are willing to invest in new technologies, they often find that solutions lack intuitive, customizable workflows. The tech tools they invest in don’t always communicate with each other, creating further challenges.
Benefits of Media Agency Invoice Automation
Based on the input gathered from its survey respondents, Modern Media Solutions identified many potential benefits media agencies can gain by automating invoice processing in AP.
Faster Processing and Cost Savings: Automation can speed up invoice processing, improve accuracy, and cut operational costs.
Scalability: Agencies can scale their operations while keeping headcount stable.
Streamlined Reconciliation: Automation frees buyers from administrative tasks to focus on more strategic initiatives.
Improved Cash Flow Management: Shortened payment cycles help advance cash flow management so agencies can better meet payment due dates, improving supplier relationships.
Enhanced Visibility and Reporting: Built-in reporting tools are designed to allow agencies to track invoice statuses, monitor cash flow, and generate insightful reports that help inform decision-making.
Increased Security: Automation can enhance security compared to paper-based processes, helping protect against fraud and supporting regulatory compliance.
What to Look for in an Automated AP Solution
Media agencies that decide to automate AP to accommodate a growing workload should consider the following elements when selecting a solution provider.
User-Friendly and Customizable: The solution should be intuitive and allow for customization to meet the unique needs of the agency.
ERP Integration: Integration with your existing enterprise resource planning (ERP) or buying systems is important to support timely updates and easy processing.
Onboarding and Setup Support: The best providers offer simplified onboarding and setup, as well as ongoing customer and supplier support.
End-to-End Platform: A centralized platform that integrates the complete media buying workflow can help improve visibility and efficiency.
Security Features: Evaluate the solution’s security offerings. Role-based access, data encryption, and multi-factor authentication are some important features.
Automating AP to Improve Invoice Processing
Modernizing AP processes will be important for media agencies as they try to remain competitive and maintain strong client relationships amid a growing accounting workload. By streamlining back-office operations through automation, agencies can optimize workflows, reduce manual errors, and focus on work that brings value to the organization.
AvidXchange offers AP automation solutions tailored specifically for media agencies. To learn more about automating your AP systems with AvidXchange, schedule a consultation with one of our experts.
Download a summary of Modern Media Solutions’ full report now.
The information presented on this page is based on research and intended for educational purposes only. Anyone seeking to follow the information contained herein should consult their own advisors and conduct their own research prior to doing so. AvidXchange, Inc. and its affiliates disclaim any and all liability resulting from reliance on the information contained herein.
