Today, many agencies’ AP departments approve vendor invoices for payment as long as the invoice falls within the approved purchase order amount. That is the only parameter used to process invoices for payment. This is called Bottom Lining. The practice of bottom lining may serve the agency and save them vast amounts of time in the reconciliation process, but it is a huge disservice to the client. At A3 Media, “Bottom Lining” is a bad word, well maybe two words!
Media invoices are generally generated after the run, sometimes as long as 6-8 weeks after the conclusion of the flight or billing period. This practice hinders prompt reconciliation and close out. That is one of the reasons why many agencies bottom line their vendor invoices just so they can move things along. Another reason why agencies may bottom line their invoices is that it saves them considerable time and paperwork in the reconciliation process. When you bottom line invoices you are not checking to make sure that you got what you contracted for such things as impressions, pacing and rotation. These agencies don’t check the details, and as we all know, the devil is in the details.
One of the details that is important to review during the reconciliation process is reviewing the invoices to determine if it is based on estimates or actuals. Does the invoice include the real metrics verified by either the spot log affidavit or confirmed via the vendor’s dashboard? A3 only processes invoices based upon actuals, not estimates and there must be supporting data provided to support the charges on the invoice. It’s important to review the backup data prior to payment processing to ensure that spots were run in the contractual places, that pacing is correct, and rotation is right. In one such case for one of our clients, we confirmed that the cable buy invoice was under contract total, but upon closer inspection we determined that the invoice also included line items for paid programming spots (not allowed per our contract) and non-contracted programs. Both of which resulted in credits to our client. An agency that bottom lines their invoices would not uncover these charges and would in fact incorrectly pass them on to their client.
For digital buys, we rely on the dashboard data provided by our vendors. Initial review of the dashboard might indicate that the total impressions served matches the contracted amount for that period, closer inspection might indicate that impressions were not served according to pacing and/or rotation instructions. For example, we had such a case that the impressions on the invoice matched the impressions on the dashboard and the total dollar amount was within the contract specs. However, further investigations showed that there were several days that no impressions were served. In this case, we ended up getting some added value for our client.
If we bottom lined this invoice, this discrepancy would not have been found and our client would not have benefited from the added value received. When you bottom line your vendor invoices you are not verifying that you got what you contracted for, the media plan that was carefully constructed may not be validated, and credits due to the client are not processed. Bottom lining invoices is a bad idea for your agency and a disservice to your client.