As a financial decision-maker in the influencer marketing industry, your role is pivotal in shaping your agency's success. The current market conditions demand efficient Financial Operations (FinOps) for sustainable growth, competitive advantage, and resilience in uncertain times. In this blog post, we've collaborated with CFOs from leading agencies and platforms to explore strategies for achieving these goals and driving successful campaigns while maintaining operational health.
Lastly, we highlight the key fintech tools and partners you need to help your agency weather the current challenging market conditions and build sustainable growth, getting you ready to dominate your sector over the coming years.
1. Embrace Technology:
Efficiency is key to effective financial management. Embrace accounting and financial software that seamlessly integrates with your banking and operating systems. Implement rule-based bank reconciliations to handle recurring transactions, streamlining influencer payments and operating expenses, and ensuring a transparent financial picture with minimal manual work.
2. Optimise Revenue Recognition:
Accurate revenue recognition is vital for decision-making and future planning. Empower your data team with business intelligence tools to create a customised solution for automated revenue recognition. This scalable approach provides real-time insights into your agency's financial performance and frees up resources for strategic growth initiatives.
3. Go beyond GAAP with Tailored Financial Reporting:
Supplement GAAP reports with non-GAAP figures to gain deeper insights into your agency's profitability. Create non-GAAP reports with key metrics to assess different business units' performance, enabling more informed decisions. Utilise tools and technology to maximise efficiency in non-GAAP reporting.
Create non-GAAP reports with key metrics to assess the performance of different business units. Speak to different functions in the business to get a wider and deeper understanding of how you can tailor these reports.
This will help you identify which areas are thriving and where improvements are needed. Armed with this valuable information, you can make more informed decisions to steer your agency toward success, use tools and technology to maximise efficiency of your non-GAAP reporting.
4. Implement Scenario-Based Budgeting and Forecasting:
We don’t need to convince you that Influencer marketing agencies operate in dynamic conditions, where campaign budgets and revenue forecasts can vary significantly along with payment terms and costs. Implement smart budgeting and forecasting practices to make informed decisions and maintain financial stability.
Utilise historical campaign data, client projections, and market trends to create accurate and flexible budgets each quarter. Forecast revenue and expenses based on different scenarios such as how long you think it will take to be paid, when you need to pay suppliers, can you get prepayment, what flexibility you have in your contracts with suppliers and clients, allowing your agency to adapt swiftly to changing client needs or market shifts.
5. Create a FinOps Wishlist and Action Plan:
As CFO, you have the unique opportunity to shape your accounting infrastructure for operational excellence. Create a "FinOps wishlist" or roadmap that outlines the tools, tactics and outcomes you want from your FinOps. Start with the headlines and set ambitious goals. Work backwards from the goal until you can see the path and timeline for each item on your list.
Make sure you identify the commercial and operational values of each to other executives in your business where needed - i.e. the CEO probably won’t care too much that a tool that costs £500 per month, will help you open Excel a bit less each day.
If your list is more about how your team operates and moves towards better functioning, quarterly OKRs derived from the wishlist will provide a clear direction and keep your team focused on continuous improvement.
Adopt best practices that align with your agency's growth trajectory and team capacity. Embrace change and adapt your wishlist as your agency evolves, ensuring that you always strive for optimal efficiency. Be prepared to get changes wrong and need to adjust actions as you action your plan.
6. Streamline Onboarding with Self-Service Entry Points:
Efficient onboarding of vendors and clients is crucial for seamless collaboration and payment management. Create self-service entry points that enable vendors (e.g. influencers) and customers (brands) to provide company and financial details easily, making your life a lot easier when it comes to payments and admin.
Implement user-friendly online portals or forms for KYB compliance and payment processing. Automating these processes improves operational efficiency, enhances vendor and client satisfaction, and fosters stronger relationships.
Don’t have the technology to do this in your business? MONET can help you here.
7. Optimise Vendor Management and Payment Terms:
Vendor management plays a critical role in financial efficiency. Negotiate favourable payment terms with suppliers, including influencers, to optimise your agency's cash flow. Stretching payment terms while ensuring timely payments improves your working capital position and facilitates more significant investments in growth initiatives.
If that is tough to achieve, instead you could use tools like MONET’s EarlyPay product - enabling you to maintain long payment terms for your clients, whilst offering instant same-day payouts to your vendors.
8. Strengthen Data Security and Fraud Prevention:
Prioritise data security and fraud prevention by investing in robust cybersecurity measures and ensuring compliance with industry regulations. Educate your team on recognising and reporting potential fraud or security breaches promptly. Implement multi-factor authentication for financial transactions and conduct regular internal audits to maintain a secure financial environment.
Leverage Fintech Partners for Business Resilience and FinOps Optimisation:
Until recently, specialist fintech providers for agencies and marketplace platform have been few and far between. Forcing CFOs to stitch together providers and build their own FinOps Frankensteins Monster. Thankfully, fintechs designed specifically for agencies and platforms are incoming, and guess what? we're paving the way at MONET.
9. Embrace Fintech for Instant Payments to Influencers:
Leverage fintech providers like MONET for seamless and secure payment solutions. Offer instant same-day payouts to influencers while saving valuable resources and strengthening relationships with top-tier creators.
By using a fintech such as MONET, you can access the capital you need to pay influencers the same day they complete work, whilst charging fees for the benefit of instant payouts.
MONET’s technology can be built into platforms via API, or by syncing with your accounting software to make instant payouts on demand, backed with up to £3m in financing.
10. Opt for Non-Dilutive Financing:
Explore non-dilutive financing options such as embedded invoice finance to maintain a healthy cash flow without taking on additional debt or giving up equity. MONET's EarlyPay provides cost-free off-balance sheet financing by passing through fees to influencers when offering instant payouts.
During periods of rapid growth or when dealing with delayed client payments, non-dilutive financing provides the necessary liquidity to cover operational expenses and invest in future campaigns without compromising ownership or diluting equity.
The downside of many non-dilutive financing options is that they are often inefficient, expensive and are very heavy on your balance sheet with poor flexibility.
Usually, it can take time to access the right type of financing for you, so be prepared to find and sign up to a provider before you need capital.
Speak to our partnerships team to learn more.
11. Minimise Wasted Spend on Foreign Payments:
Utilise dedicated FX providers or online payment platforms to optimise foreign payment processes, reducing foreign exchange fees and maximising agency funds for strategic initiatives.
It has shocked us at MONET how often we meet CFOs using PayPal, Stripe and other incredibly expensive FX payment providers because it is simpler than manual bank payments.
Utilise dedicated FX providers or online payment platforms to optimise your foreign payment processes. Per payment, the fees may feel small but by doing 1000s of payments each year, you could retain more of your agency's funds and allocate them to strategic growth initiatives by minimising unnecessary expenses.
Speak to our partnerships team about hassle-free and low-cost international payments through our EarlyPay product.
Summary:
Efficiency in FinOps is paramount for influencer marketing agencies to achieve sustained growth and resilience. By adopting the strategies outlined in this guide and leveraging fintech solutions like MONET, you can optimise financial operations, minimise costs, and focus on driving successful campaigns for clients. Embrace technology, explore non-dilutive financing, and streamline processes to elevate your agency's financial performance and thrive in the evolving influencer marketing landscape. With MONET's innovative solutions, you can build business resilience and position your agency for long-term success in this dynamic industry.
