In a highly charged cycle when planning is near impossible because of the pandemic, consultants are fretting about the practice of doing the work and getting paid later.
Full-service shops, mail, and media firms, in particular, are having to reevaluate how much credit they extend to clients. Axiom Strategies’ Jeff Roe, whose company now spans 42 affiliates in 35 states, said they’ve instituted “pandemic rules” when it comes to financing clients.
“We used to let the bill run a bit and just not worry about it until the day before the election,” he told C&E. “We still run the tape to win the race, because of the timing of the cash, but we’re smarter about that.”
He estimated the firm has around $5 million in outstanding invoices dating from Aug. 1. “It’s always the one you never guess wouldn’t pay,” he said.
In fact, wealthy self-funders can be problematic clients, personally guaranteeing media buys and then refusing to pay after the election — as Majority Strategies learned.
Now, New Jersey mail consultant Chris Russell is another firm owner who said he’s tightening the credit terms this cycle: “We're definitely aiming to be more exacting on collections given what we're seeing.”
The added challenge this cycle may not be the fall cashflow for clients. Some fundraisers told C&E the donations coming in are back to pre-pandemic levels — and beyond in some cases. The issue is that campaigns may have to spend beyond Election Day as races go undecided because of mail-in ballot counting. In that environment, consultants will have to weigh how hard to press their clients for unpaid invoices.
Monique Elwell, chief operating officer of video production platform Storyvine, said consultants should start having conversations with clients now if they’re worried about getting paid. “I’m going to be nice and wait three months before I complain — that is the wrong attitude,” she said. “If you anticipate a problem, always reach out and complain about the check before it’s due.
“I expect there to be great problems so I’m a little bit more fastidious about following up.”
But remember, the client on the other end of the collections call is human, she added. “Tell me, what’s going on on your end? When you get out of that blame state, you can really work towards a reasonable solution.”