In a recent CEO Stars session, every ad agency CEO had noticed a trend towards more clients wanting to pay their invoice with a credit card.
This is a real challenge that has the potential to erode into your bottom line, especially if you end up eating the fees.
If you’re seeking a 20% profit on each project – and that client uses a credit card – then you’re giving up 3% of your project’s 20% … which means you’re losing 15% of your profit for that project.
Best ways to meet this head-one? When the client offers to pay the invoice by credit card, you have two simple responses:
1. We’re not set-up to accept credit cards.
2. We accept credit cards, but we must charge the fees back to you.
Whatever your policy is, state it up-front when discussing compensation and note it clearly on your invoices, so there are no surprises.
Question: Does your agency accept credit cards? How do you handle it? Do you have an early payment policy? Share your thoughts in the comment area.