Linc’s Carlson says open book accounting move will help restore credibility to industry
Perth marketing and communications advisory firm Linc has introduced open book accounting from 1 July in a move to help restore credibility to Perth’s marketing industry.
John Carlson (pictured), Group Managing Director at Linc, said Linc’s open book accounting system, where client accounts including time sheets and supplier invoices are open to inspection and examination at any time, is a marked change to standard industry practice.
“There is a lot of concern among clients about a lack of transparency with questions over excessive margins, and rightly so,” said Carlson.
“Historically public relations, marketing and advertising agencies have rated poorly in measures of trust with clients concerned about a lack of transparency and a black hole effect. In many cases concern has been justified with inexplicable mark-ups of 100 percent or more on top of external costs.
“If the marketing industry wants to be taken seriously, we need to focus on intellectual property and strategic insight, and a fee for service relationship. This means adding value to our client’s bottom line via our advisory skills rather than acting as salespeople collecting hidden margins and commissions.”
Carlson said the move to open book accounting is the first of many major structural changes at Linc reflecting an evolutionary period at the firm, a constantly changing market and commitment to being at the cutting edge.
He said he strongly believes this consultative approach will deliver more for both clients and the firm alike and will involve being completely transparent, offering high quality advice supported by all associated marketing services.
22 Comments
Time sheets and supplier invoices revealed.
This is the sort of thinking that could of saved MF.
Well done Linc.
‘Linc’s Carlson says open book accounting move will help restore credibility to industry.’
Why do we need to restore credibility? This is your problem Linc. The rest of us have been honest and up front for years.
100% mark up. That is outrageous.
You would get the sack here in Subi for invoicing at only 100%.
100% mark up is mates rates.
250% mark up please.
If agencies are struggling to come up with good ideas to present they can now present their invoices instead. Maybe we should mount them on black card. Most clients are not concerned with the creative work. They are hanging out to see those invoices.
Wow, welcome to the real world.
I have worked at 10 agenices over 17 years. 90% of these agencies would be only too happy to show a client timesheets and supplier invoices as the terms of business have been very clear up front.
What’s the point of biting the hand that feeds you? Its just too risky to be anything other than transparent – especially these days and in this market.
If you are truly your client’s business partner, I don’t see why you would want to rip them off anyway.
12.55 – the invoices of some Perth agencies is probably their best creative work…
Seriously though, I can’t think of many other industries where this is done?
When the printer quotes his next job, I’m going to ask what his profit margin is… or when I pay my next monthly insurance installment, I will demand to know how much time has been spent on my account.
Interesting. Just caught up with this thread. While in Cannes recently I was asked what was happening in Perth by John Hegarty and Dave Droga. If only I had know about Linc’s open book accounting system, where client accounts including time sheets and supplier invoices are open to inspection and examination at any time. Then I would have had something interesting to talk about.
This is the shake up we need folks. Don’t let this go by without giving it some serious consideration. If we are to be taken seriously maybe we need to be more transparent and take some of these exciting ideas on board. Let us remember we are down there with used cars salesmen in the credibility stakes. And as John said “There is a lot of concern among clients about a lack of transparency with questions over excessive margins, and rightly so.” It’s time to change. It’s time to stop the confusion and give clients the truth. Real invoices. Real time sheets and genuine accountability. Soon we’ll be up there on the credibility ladder with doctors, firemen and police officers. Respected people in the community and a career they will encourage their kiddies to follow in the coming years.
This is our time. Remove that automatic 50% margin short cut in MYOB, ask the creatives not to include their 3 hour lunch breaks in the creative column of the time sheets for those 10×3’s and feel the freedom. Y E S we can do this.
I can think of 303 reasons why this time sheets and supplier invoices being open to inspection and examination is a good idea. Market forces at the moment are making us stop and think about certain agencies over charging their clients. For these agencies it could be a rare opportunity to make a few small changes and take some of John’s new ideas on board. Maybe it they thought about the brand they are paid to promote more than the profits they will make, it would be better for everyone. It would be wrong to link the name of any agency to over charging but if you’re as curious as a meerkat you just work out who they are.
I’m interested in this black hole effect. Please explain.
Nice idea John. This is thinking on a new level.
Why isn’t this thread on the national blog? This is an issue that needs discussion on a national if not international level.
nice work comment 6.11pm. very well done!
this whole open book concept is absolute codswollop anyway – it will just lead to the fudging of the back end system so you have no idea how much time was spent on it, nor how much external costs “really are”.
although… it would put quite a few companies out of business, which i guess isnt really a bad thing.
You will find that most agencies have had full transparency with their clients regarding timesheets and supplier invoices for at least the last 13 years that I have been in Perth. It is a worry if this is new thinking.
cant imagine this would work for a few agencies around town! creative CFO’s can only get you so far.
It’s not new thinking. It’s a load of bullshit.
12.29 is spot on. Way behind the times
I think it is for the client to satisfy themselves that they are working with their agency in a good way. It’s a two way street and both need to be happy. But if you aren’t doing the right thing as an agency and the client finds out you’ll be in trouble. The only thing worse than not being transparent is prentending to be transparent and getting caught. Clients can’t complain if they haven’t got a clue what’s going on. I would say, on the whole agencies need to work on smaller returns and longer relationships.
If Linc wanted to start a debate it should be about clients paying appropriately for the IP that their agencies generate. For the most part agencies don’t get properly remunerated for the great business changing ideas they do have, clients loathe paying for real thinking in Perth. If they did it would probably remove the need to charge for every last minute spent working on the business. Not an excuse for shonky accounting though.
The whole timesheet system is flawed. People feel the need to put something down and the earlier comment about a three hour creative lunch ending up on a 10×3 is so true.
And management say “don’t worry, we don’t use them to track productivity” WTF!?
When I worked at one of the big WA (years ago), you had to enter 7.5 hours of chargeable time into the previous day’s timesheet before the email system would let you log in.
My agency have never used timesheets for creative or account service, and never will. Now that’s what you call trust. Radical, hey?
great range of comments. i am most amused by the pointed comments from people who will not identify themselves. now – that’s integrity.
It’s got nothing to do with integrity John. It just gives us a chance to bag your silly idea. The best bit is we can then have a whinge with you about the CB blog and all those anonymous commentators without you knowing it one us. It’s been fun.