I am an offshore marketing agency owner working with US companies. By increasing our client base, we see a trend of late invoice payments or some hustle getting the invoices paid on time. Do you have any tips on how to do proper collection for offshore agencies?

Require payment up front, either in full or as a deposit. During your onboarding process, make it clear that your policy is to pause future work if the client becomes past-due. And then follow that policy if it becomes a problem—be polite but firm.

Concerned you don't have the reputation or track record to require payment up front? Look at the social proof you're using in your marketing. Mention U.S. brands you've worked with (if you have permission to do so). Share testimonials and case studies. The goal is to reduce risk to your prospective clients, so they're less likely to push back on pre-payment.

In the U.S., I see independent agencies doing primarily Net 30 as their payment terms. If you're doing that now, shorten terms for new clients to Net 15. (Don't do "Due on Receipt" since no one pays on receipt; you should have a real due that that's some point in the future.)

Here's more on preventing this long-term:

Onshore agencies struggle with this, too, so you're not along in facing this problem. Good luck!

Background: I led business operations at 2 digital agencies, have worked in digital marketing since 1997, and advise agencies about operations, strategy, and leadership in (so far) 15 countries. If you have followup questions, request a call here on Clarity; I'm glad to help!

Answered 6 years ago

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