PRCA: clients should pay PR agencies within 30 days

The PRCA is launching a campaign calling on clients to pay agencies within 30 days, as a new survey shows a quarter of agencies generally are not paid within that time frame.

PRCA's Francis Ingham:
PRCA's Francis Ingham:

The association is calling on clients to join the campaign and sign up to the Government’s Prompt Payment Code, which sets standards for payment practices. In February Matthew Hancock, the business minister, announced plans to make 30-day payment terms the standard, with 60 days the new maximum limit.

A survey of members of the 60-strong PRCA Leaders Panel showed a quarter of agencies reporting that clients generally take more than 30 days to pay them. One PR agency said that they have had to wait for 120 days to receive a payment.

Seventeen per cent of the agencies surveyed argued that it was unethical for clients to take longer than 30 days to pay and 36 per cent said that it was unethical to pay in more than 60 days.

PRCA director general Francis Ingham said: "Many clients treat payment terms as a way of shoring up their own cash flow. It is unethical to exploit PR agencies in this way, many of which are SMEs.

"I urge companies to sign up to the Prompt Payment Code right away. I also urge the Government to make prompt payment a legal requirement, not merely a voluntary measure."

Sarah Wrixon, founder and managing director of PR agency Salix and Co, said: "Too many large organisations think ‘normal’ payment terms of 40 days – which they pay in 60 – are okay. They’re not but many smaller organisations don’t challenge this, or apply interest for late payments, because they’re frightened of losing valuable business. Why should smaller companies like ours essentially provide interest-free loans to much larger organisations?"

Ben Schofield, comms manager at the Institute of Advanced Motorists, said: "Every invoice should be paid within 30 days; there is no reason why any company needs any longer to pay for the services they have been provided with.

"If by accident or design companies are stalling on paying up, they are causing agencies severe hardship and could potentially put them out of business. It is an underhand and highly unethical way to treat a commercial relationship, and it has to end."

PRCA in-house members that are already signed up to the Prompt Payment Code include BT, Diageo, Direct Line Group, John Lewis Partnership, Marks & Spencer, National Grid, Pinsent Masons, Shell UK, Unilever, Vodafone and Yahoo.

The PRCA is encouraging people to tweet support for prompt payment of PR agencies by using the hashtag #30days.

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