Agencies are not banks: Is Southeast Asia’s advertising industry facing a payment crisis?

Earlier this year, the Association of Accredited Advertising Agents Malaysia (4As Malaysia) raised the alarm over the growing use of extended payment terms imposed by advertisers — warning that payment cycles once settled within 30 days have increasingly stretched to 90, 120 days, or longer, effectively forcing agencies to finance client campaigns upfront while waiting months to be paid. 

“This is not just a commercial issue; it is a matter of fairness and responsibility,” the association said through its President Tan Kien Eng.

The statement struck a nerve — and not just in Malaysia. Across Southeast Asia, agency leaders have long navigated the same tension: delivering work on time while chasing payments that arrive anything but. For many, especially smaller independents, it’s less an inconvenience than an existential pressure point.

But is Malaysia an outlier — or simply the first to say out loud what the rest of Southeast Asia’s advertising industry has long felt?

For our latest feature under our Inner State series, we recently spoke with Anish Daryani, Founder, President Director and CEO at Moonfolks and President Director at Havas Moonfolks; Pradhana H. S., Chief Executive Officer at Volare Advertising Network; Yollie Viola, Finance Head at GIGIL; and Jeanne Go-Mendoza, Chief Financial Officer at Propel Manila, as their perspectives shed light on an issue that many say has quietly shaped the way agencies operate, survive, and grow across the region.

A regional problem

The consensus among the industry leaders is that this challenge is far from isolated. 

Volare’s Pradhana confirmed that longer cycles are a familiar reality in his market in Indonesia. 

“In recent years, some payment cycles have become longer than traditional 30-day terms, particularly within larger organisations that operate with more complex procurement and approval structures,” he said. “It is an industry dynamic that requires constructive attention to ensure long-term sustainability across the ecosystem.”

Meanwhile, Anish Daryani of Havas Moonfolks was careful to draw a distinction that often gets collapsed in the broader conversation. 

“Extended payment terms and payment delays are two separate issues altogether,” he said. In his experience, most clients in Indonesia are reasonably disciplined — paying as per the terms of payment (TOP) agreed in the contract — but the existence of extended TOPs in the first place still puts pressure on agencies to make a judgment call before they sign. 

“It is up to the agency to decide whether they can afford such high credit periods from the client, before they sign on the client,” he noted.

Propel Manila’s Jeanne affirmed that the strain is felt in the Philippines as well. “Longer cycles do tie up working capital and that’s a shared pressure for agencies across the region, ours included,” she said — though she was quick to add that the conversation needs to go deeper than the headline issue.

The operational reality for agencies

Whatever the cause, the downstream effects are consistent. Cash flow tightens, vendor relationships strain, and the pressure ripples outward well beyond the agency itself.

“Cash is the lifeblood of any business,” Daryani said. “Extended payment terms can put stress on an agency’s cashflow. It also affects vendor partners — production, tech, and others. It just doesn’t affect agencies, but the entire ecosystem.”

Pradhana echoed this, framing it in terms of the people-first nature of the business. 

“Extended payment cycles require agencies to manage cash flow and operational planning more carefully, especially for campaigns involving upfront commitments to media partners, production vendors, technology platforms, and talent resources,” he said. 

“As agencies are fundamentally people-driven businesses, maintaining healthy financial cycles supports continued investment in innovation, capability development, and service excellence for clients,” he added.

Jeanne offered a more granular view of where the operational pain actually originates. In her experience, the problem isn’t always a client refusing to pay — it’s that the administrative machinery surrounding payment is broken. 

“Approval and compliance processes have grown more layered on both sides — POs, service agreements, completion sign-offs — and the payment clock effectively starts much earlier in that chain than the invoice date suggests,” she said. The result: agencies absorb weeks, sometimes months, of invisible delay before a payment term even begins to count down.

How agencies are responding

Rather than waiting for the industry to self-correct, several agencies have built internal processes designed to reduce their exposure before payment delays become a crisis.

At GIGIL in the Philippines, Yollie points to vigilance at every stage of the billing cycle as the cornerstone of their approach. 

Key practices include sending invoices to clients within 24 hours of completion, conducting regular follow-ups on outstanding payments, and immediately looping in the accounts team once an invoice exceeds its agreed credit term. 

“Consistency in follow-ups is critical,” Viola said. “Delays are easier to address when they are managed proactively rather than reactively.”

GIGIL’s approach also emphasises a clean separation of responsibilities between finance and accounts — with finance managing collections and payment follow-through, while accounts maintains the client relationship and keeps conversations focused on partnership rather than transactions. 

“Regular, honest, and open communication builds trust with our clients,” Viola added. “This trust allows us to maintain strong relationships while also being firm and consistent in managing collections and payment timelines.”

At Moonfolks, discipline begins even earlier — at the client selection stage. “We get market intelligence before signing on a client and wouldn’t take on a client that has demonstrated poor credit history in the past,” Daryani said. “We have low tolerance for payment delays. If we have a client that is consistent with payment delays, we are not afraid to take hard calls.”

For Volare, the answer lies in financial governance and proactive client communication. “We focus on prudent cash flow management, diversified client portfolios, and structured project planning to reduce concentration risk,” Pradhana said. “For larger or production-heavy engagements, phased billing structures or project-based payment schedules often create a healthier and more sustainable framework for both parties.”

Jeanne’s prescription at Propel Manila targets what she calls the “silent runway” before invoicing. She advocates for shared service-level agreements that impose committed timelines on each step of the pre-billing process — from PO issuance to vendor onboarding to invoice acknowledgment. 

“None of these touch the headline payment term,” she said. “They target the silent runway in front of it — where 30, 45, 60 days actually hide. The same way we’d align with a client on a creative timeline, we can align on documentation turnaround.”

Rethinking the conversation

Perhaps the most pointed reframe came from Propel Manila’s Jeanne, who argued that the industry may be directing its energy at the wrong part of the problem entirely.

“The bigger story isn’t simply ‘clients paying late,'” she said. “It’s that approval and compliance processes have grown more layered on both sides — POs, service agreements, completion sign-offs — and the payment clock effectively starts much earlier in that chain than the invoice date suggests.”

Joanne’s argument is that the real time loss happens in the invisible runway before an invoice is even submitted. An unacknowledged invoice can sit in a client’s system for weeks before the official payment clock begins. Vendor onboarding that should have been completed at kickoff gets done post-delivery, stalling the billing process entirely. POs that should have been issued upfront arrive late, leaving agencies delivering work with no document to bill against.

Her prescription: shared service-level agreements that impose committed timelines on each of these steps. “None of these touch the headline payment term,” she said. “They target the silent runway in front of it — where 30, 45, 60 days actually hide. The same way we’d align with a client on a creative timeline, we can align on documentation turnaround.”

Should regulation enter the picture?

With the issue gaining visibility, the question of whether government or industry intervention is warranted has begun to surface. Opinions, however, are divided.

Daryani believes existing commercial contracts already provide agencies with legal recourse — but sees room for industry bodies to go further. 

Beyond regulations, he floated a more practical idea: “Industry bodies can certainly do more — like calling for better regulations on TOP, or creating a blacklist of regular defaulters to protect the industry at large.” 

He was also quick to credit 4As Malaysia for raising the issue publicly. “4As Malaysia has demonstrated exemplary leadership in this matter and deserve commendations for the same,” he said.

Pradhana takes a more measured stance on hard regulation, preferring industry-led frameworks over government mandates. “Rather than strict regulation, I believe the industry would benefit more from stronger standards, transparency, and shared best practices established through industry associations and market stakeholders,” he said. “Every market operates with different commercial realities, so maintaining flexibility remains important.”

A shared responsibility

What emerges from these conversations is not a simple villain-and-victim narrative. The issue is structural — shaped by procurement complexity, layered approval processes, and an industry culture that has, perhaps for too long, absorbed financial imbalance as an accepted cost of doing business.

But there are signs of a shift. Agencies across the region are pushing back — not loudly, but deliberately — through tighter contracts, sharper client screening, and more disciplined billing processes. Viola perhaps put it most plainly: “Nothing beats honest and open communication with clients.”

And with 4As Malaysia now putting the issue squarely on the industry’s agenda, the hope is that candour at the association level will translate into change at the contract level — for the benefit of agencies, their vendor partners, and ultimately, the brands they serve.

As Pradhana put it: “The strongest agency-client relationships are built not only on creative ambition but also on trust, transparency, and long-term sustainability.”

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Whether through stricter internal processes, earlier commercial alignment, or broader industry advocacy, the path forward demands accountability from all parties. Agencies are not banks. But until the industry collectively treats fair payment as a baseline standard rather than a negotiating point, many will continue operating as though they are.