By Kate Bastable 
In most agencies, client services teams do an amazing job and wear a lot of hats. They motivate creatives, manage (often large and complex) projects, navigate client needs and juggle budgets and deadlines.
So why would we encourage you to ask them to wear yet another hat, the finance hat? Especially if you have a dedicated finance person or team to manage the numbers?
In short, the answer is to keep your jobs profitable. To keep your agency growing and thriving, instilling your client services teams with commercial awareness is a must. Here’s why, and how…
When month-end rolls around, how often are your finance people cracking the proverbial whip to make sure all invoices and costs are in with them? And how often do your client services team give a loud collective sigh that ‘here we are again’?
But the reason finance wants to get all their ducks in a row isn’t just about flexing their muscles. It’s because there can be a disastrous domino effect if they don’t know exactly what’s coming in and what’s coming out.
While many team member think this means simply making as much money as possible to fund luxury lifestyles of agency leaders, this couldn’t be much further from the truth. It’s about covering overheads and paying salaries, as well as knowing what’s left in the pot for things like training, equipment, personal development and other business investments.
Most client services professionals come into the job without any financial background or training, which is fair enough. But there’s no reason they can learn at least the basics. So, what do they need to know?
Glossary of terms
Ask your finance team to give your client services a short lunch and learn-type presentation. Here, they can put together and explain a glossary of terms for what’s important within your agency, and what the consequences and impacts are of processes not being followed.
Rather than finance shouting at them when they do it wrong, this way is more about educating and helping. Give them real-world analogies and help to bring commercial understanding and good practice into their day-to-day working lives.
They don’t need to become expert accountants or bookkeepers. Just think about explaining things like a balance sheet, profit and loss, revenue recognition, journals.
Impacts and implications
Highlight the implications of, for example, not putting a PO on the system. To them it might be a silly oversight which they can quickly rectify when they realise. But the supplier invoice has already come in and that then has a massive ripple effect on the gross profit of the job.
And if finance have already declared the profit on the job because it was closed three months ago, they’ll have to go in and manually adjust.
(Client services: this is why finance get annoyed when you suddenly realise you’ve had a client invoice in your inbox for three months and they’re now chasing for payment. And they had no idea it was coming in because there was no PO, which then impacts cashflow as well as profit.)
A big take out here is that when client services are estimating a job, if they think there’s likely to be any costs on that job, always include them. Better to do it this way round than leave it out and then incur the cost (and lose the profit).
Understanding cost rates versus charge codes
At first glance it might seem these are the same thing. But while your charge code is your chosen rate per team/person/skillset, your cost rate is what tells you exactly how much a piece of work costs your agency.
Cost rates are important for client services to understand and give them the impetus to keep projects on course timings wise. These can be calculated as a blended rate, including every overhead your business has, such as salaries, benefits, pensions/NI, bonuses, non-chargeable staff and all the running costs of your agency.
Knowing the true cost of a project running over by ‘just a few hours’ can really help client services to keep timings tight and true to the estimate.
Incentivise and inspire
Back to the ‘why am I running around sorting out invoices just to fund my boss’s nice lifestyle?’ question. It’s highly unlikely this is the case. All businesses need to make profits. But if this is what client service teams are thinking, they’re unlikely to feel incentivised.
So, this is about giving them a sense of purpose with each project they own. A sense of ‘I was in charge of that job, and it’s made good money’ as opposed to ‘I was in charge of that job and now it’s made less money all because I forgot to raise a PO.’
Another incentive is to explain more about what’s in it for them. Making jobs profitable obviously gives the business more money for payrises, bonuses and personal development. And it’s very easy for them to make the business case for a payrise or a training investment if they can demonstrate they are on a profitable path with their projects.
Ultimately, this isn’t about creating a second finance team or forcing client services to crunch numbers. It’s about giving them some basic understanding of the aspects of their job, like forecasting, estimating and overservicing, which can have a real and direct impact on the agency’s fortunes.
