• by Steve McClellan , August 6, 2013

Despite reports of a few high-profile clients demanding longer-term payment schedules from their ad agencies a new survey from the 4As concludes that most clients are still paying their bills within 30 days.

The industry was abuzz back in May when the Wall Street Journal first reported that Procter & Gamble was implementing a new policy that would extend the company’s payment cycle to 75 days from the time that it is billed. P&G said it would put the new terms into effect as contracts for agencies and other vendors come up for renewal.

Other big marketers also plan to take their sweet time paying their bills. Or already do. Advertising Age reported that both Johnson & Johnson and Anheuser-Busch InBev pay vendors 75 days out or longer. And Mondelez, spun off from Kraft last year, recently confirmed plans to start paying 120 days out.

Two holding company CEOs—Omnicom’s John Wren and Interpublic Group’s Michael Roth—responded by declaring on recent conference calls with investors that the agencies in their companies’ portfolios would strongly resist marketer attempts to extend payment terms. Both used the term “banks” to describe what they aren’t and don’t want to be.

The 4As survey, conducted in late June and early July and covering 93 mostly holding company agencies found that 69% reported receiving their base compensation within 30 days or less. The trade group said that the finding was in line with the results from the last billing practices survey it conducted back in 2010. Also, the group concluded, “there is relative consistency across service activities and media channels.”

The 4As report also indicated that agencies pre-bill some clients to “effectively blunt the impact of slower payments,” from an accounting perspective. The survey quoted one unnamed agency executive who explained that the practice “allows the client to claim a 60-day payment term ‘victory’ and keeps our cash flow neutral.”

The survey also details billing practices for network TV and other media, production activity and incentive compensation. More than 95% of respondents indicated that incentive compensation is awarded in a single annual payment. The complete survey can be downloaded from the 4As website.