What is the management fee you apply to third-party costs?
Like almost every agency, we charge a management fee on almost all third-party costs as standard.
What are third-party costs or services?
These are typically anything provided by an outside supplier, for example
- Printing
- Photography
- Recruitment
- Venue booking
- Translation
What the management fee does not cover:
It is not a cost that covers our consultancy time spent briefing, supporting with delivery and coordinating the third-party services. This time is charged separately as core consultancy fees.
What the management fee does cover:
- Our assurance of the quality of the work delivered by the third-party’s goods or services
- Our investment for scoping and securing an appropriate partner to deliver the third-party goods or services
- Us taking on the risk of paying the supplier on our clients’ behalf, and the contractual burden of this, removing the hassle from our clients, ironing out any creases without our clients needing to worry about them
- The administration cost of processing the payment
- Cost of interest (the cost of interest on the balance we carry) and loss of investment opportunity (money used for these third-party costs is money that we can’t invest and earn interest on)
The fee is applied when we enter a contract with a supplier under our name, and pay them directly, invoicing our clients for the amount.
This is normal practice for agencies,and we often charge at the lower end, always being mindful of the scope and nature of the work.Clients don’t have to purchase services directly through us, and may decide to pay directly, if they would prefer to handle it directly.
In addition to caring about the quality of the work we provide, whether delivered by a partner of ours (a third-party) or ourselves, we also care about transparency; we will always be clear on the percentage fee applied.