This won’t hurt a bit: 6 reasons agencies (should) welcome a Contract Compliance Audit

The account’s running smooth as silk, the campaign metrics are through the roof, the review meetings are upbeat and creative awards glimmer in the near distance. And then out of the blue, and about as welcome as a skunk at a picnic, the email comes in from client saying Procurement would like to set up camp at the agency to do a contract compliance audit. Just a few days, you know, a bit of housekeeping, and is next week OK for everyone?

As the marketing contract compliance auditors sent in by some of the world’s best-known brands to carry out this bit of apparently undue diligence, we know what you’d expect the hapless agency to be thinking. After all the impossible deadlines, the inspirational creative, the razor-sharp media buying, the routine miracles served up by the account servicing team, they thank us by sending in the bean-counters? Don’t they trust us? Sheesh.

It’s about counting the apples, not upsetting the applecart.

Truth is, more often than not, we’re met with hugely positive vibes. Partly it’s because contract compliance audits are just part of doing responsible, transparent, productive marketing activity these days — the ‘black-box’ approach to account management is so 1980s. And partly, as the term ‘contract compliance audit’ implies, we’re there to scrutinise how well the commercial agreement is working for both parties. As we like to say, it’s about counting the apples, not upsetting the applecart.

“Yeah, yeah,” you might say, “But you’re paid by the brand based on how much money you pull out of our woodwork.”

Not true! We don’t work on a contingent fee basis. We’ve never taken a dime from a client based on the amount of money released through an audit. We’re hired solely to audit the performance of the contract between brand and agency — not the agency itself — in a completely even-handed way. If the client is part of a problem we find (and they often can be) we’ll tell ‘em without hesitation.

Many contracts come with built-in #fail written into them.

In practice, if we’re asked by one of your clients to carry out a Contract Compliance Audit, here are six ways in which your marketing, media or creative agency could benefit:

1. We highlight impossible contracts and clauses.

Many contracts come with built-in #fail written into them. They contain clauses that simply can’t be fulfilled or are problem-prone. For example, unrealistic processes or impossible timelines which require the agency to chase a lot, and/or threaten delivery deadlines and put unfair pressure on costs. We’ll actively enquire about what works well for the agency and what doesn’t. Having us impartially commenting on the hassles your business faces just doing its job usually gets taken very seriously by our mutual client.

2. We tell clients when they’re not playing fair.

We identify departures from the contract on the client’s side, and the consequences thereof. For example, POs seldom being raised in a timely fashion, project briefs absent or late to the party, and client-side internal conflicts and process problems which needlessly burden your agency.

3. We alert you when your business is financially exposed.

Our work can often reveal ‘surplus pots’ and ‘banks’ where the agency is left dangerously exposed, with the ability to spend unused funds which lack the formal approval required by contract. Not a great place to be — as your FD would be sure to tell you. We certainly will.

4. If you’re owed money, we’ll tell you.

If we find monies owing to your agency — perhaps because a service fee has been overlooked, or late payment interest charges haven’t been applied — we’ll tell you and the client. Reimbursements are a two-way street.

5. We’ll help make the first and future audits painless.

We’ll actively help your people assemble data and prepare for audits, saving you time and money and suggesting processes and documents that leave your agency able to handle future audits without missing a beat.

6. Our work helps cement the relationship.

If you find this stretches your credulity a bit, you really ought to read the section on What Clients and Agencies Say About Us in full. Some choice snippets:

1. Client: “… The key benefits for the marketing teams were: 1. an absolute, agreed fairness for both client and agency; 2. an environment with no fear of spending because there is no risk of being overcharged; 3. a saving of management time and guaranteed value for money; 4. reciprocal trust and respect between client and service supplier…”
2. Full Service Advertising Agency: “The outcome is the relationship with our client is now stronger than it was previously.”
3. Client: “Post audit, for the Agency to thank us for the audit process and how much they have learnt about themselves and their processes was a revelation for all parties.”
4. Digital Media Agency: “The open and transparent way of working was very refreshing.”

In our years at the contract compliance coalface, we’ve seen it all: no contracts, two sides of A4 covering millions of spend, hundreds of pages that still somehow miss the essential clauses… marketing and media contracts originating from the agency, from the client, and sometimes forming a key measure in an agency’s new business pitch. Whichever way it goes, one thing’s set in stone: nothing goes back from us to our client unless the agency has seen it first, had a chance to clarify and clear up, be prepared with answers the client might seek. We’ll say what needs to be said, but with your foreknowledge and ability to correct.

So go on, say ‘Aaah…’ and look forward to a brighter, whiter smile afterwards.