Unreasonable payment terms are (justifiably) a hot topic. In our agency compensation practice, we’re seeing a range—some clients want 30 days, some 60, others 75—all for reasons specific to their business.

But agencies cannot be banks. Payment terms need to be reasonable. No agency should be working 120 days (let alone 365!) without getting paid. When a client and agency are establishing fees and commercial terms, there must be a clear understanding of how a client’s business is run and how they’re managing their budget. And the outcome of any agreement should be a fair fee as well as business terms that make sense for both parties.

If you’d like to learn more about how we address payment terms with our clients and their agency partners, please contact us.