When you serve notice on an agency, it’s amazing how quickly everyone takes their eye off the ball.
A well-known brand asked us to carry out an exit audit of a PR agency. The spend had reduced in recent years, but it was still a sizeable account with fees and third-party costs in roughly equal measure.
When a brand serves notice on an agency, the exit audit is the last occasion on which the brand scrutinises the detailed transactions and hence it’s important to carry out a wide-ranging review. The information we received from the brand’s Finance team indicated that all amounts had been settled with the agency.
When we were on site at the agency, we requested the same information from the agency’s perspective. In contrast, it showed that a material five-figure sum was due to the brand. When we investigated, it transpired that the brand had not accounted for a sizeable credit note, nor had it paid a monthly fee invoice.
Our review also covered reconciliations of third-party costs, which uncovered another similar amount due to the brand. Furthermore, as part of our detailed testing, we unearthed a series of preferred supplier rebates which the agency had not offered back to the brand, contrary to the terms of the commercial agreement. This amounted to an additional five-figure sum.
We were therefore able to return a substantial amount of money back to the brand (approximately 8% of its spend during the audit period), enough to fund an additional PR campaign with the new agency.
How did this all come to pass? Well, essentially once the brand knew it was going to serve notice on the agency, its focus and resource shifted to the incoming PR agency; on the part of the agency, the same thing effectively happened and, by saying nothing, it stood to receive a nice leaving present. The brand now knows whom to call when it serves notice on an agency!