ADVAN pushes for Debt Reconciliation Committee
By Felicia Nwosu
As the debate for media debt continues to be on the front-burner in the industry, the Advertisers Association of Nigeria, ADVAN, is proposing the re-introduction of Debt Reconciliation Committee as a means to achieving zero debt free transactions between the client and the agency sides of industry.
Speaking during a media chat, the President of the association, Osamede Uwubanmwen, said he has been championing the setting up a debt reconciliation committee for some time now as part of the efforts to resolve the industry debt issue.
“As far back as March (2022) when we newly came in, the first meeting we had with members of Heads of Advertising Sectoral Groups (HASG), we told them this is the way to go. We are pushing for Debt Reconciliation Committee because once the contract has been agreed, payment should be according to the terms of the contract. What we are saying about debt now, there was something that led to it. If the contract was implemented, would there be debt conversation? So let’s implement the contract by using this debt reconciliation process. So that every contract that has passed its agreement period, it will be the responsibility of the Head of that sector in the committee to ensure its member comply to the terms of the contract. For instance, I do hold my members responsible for complying with their contract terms. There was a particular one that they sent a letter to us, stating that our member was owing and we immediately reached out to them and that money was paid.”
He maintained that it was necessary to re-establish the Debt Reconciliation Committee to fast-track the pace of payment and also repel the fear in members to speak out.
“In terms of the volume of media debts, if we don’t have this Committee, we may not be able to get to a correct assessment because some people will not talk. They are afraid.”
For instance, I was handling a brand; as an advertiser and I got a complaint from somebody who claimed he was owed. Knowing I had cleared the bill regarding that advert, I asked him to come the following Tuesday for reconciliation with other parties involved. To my shock, he called to say he was not coming because, as he put it, ‘they will blacklist me and I won’t get P.O’s again”. He was afraid to challenge for his money.
“To get to the bottom of the debt and how the debt is, if we have that committee, it will be easier to report to your own side, it is easier because if it is ADVAN members, they have access to me, If the debt reconciliation committee becomes endorsed by everybody, nobody would want to owe anybody because whoever goes to report you, you cannot hold the person responsible, because the person that will chase you can even be your own president, but with that, I will chase ADVAN members, and the same goes to other sectoral groups.
The ADVAN boss blamed the inadequate financial report on media spend on lack of accurate data and requisite information from the key players while reiterating the need for an active and resolute committee that will foresee the media debt activities.
He urged the industry to understand the existence of various modes of payment for transactions across the industry to strengthen the relationship among the professionals, while expressing that ADVAN’s bone of contention lies with the fact that AISOP should not dictate the terms of any contract, rather it should allow parties to agree on their terms.
“That takes away a very huge part of contracting, terms of discussion is part of contracting, because the law has already defined the mode of payment which has eliminated the need for discussion over the contract. For payment days in any organisation, there are processes to achieve a finished good from raw materials; it takes certain days to convert, sometimes 90 days, so how can I pay you at 45 days. Our payment cycles are not the same because we operate in different industries, which is why we keep saying you don’t understand our business and our flow. Some organizations that we work for have 60 days mode of payment and they collect products before they pay us. How do I now pay when I have not collected the money for the product that I have sold. The conversation is that if you understand that everybody at ADVAN does not do the same type of business, it becomes a problem to give a fiat of 90 days when it takes 90 days to convert my product to cash but those who collect their money immediately can pay you.”
Recall that, as part of the then APCON reformative measures, it inaugurated Special Committee on Media Debt Issue (ASCOMDI), in 2007 to settle issues related to debt between agencies and media owners with members drawn from the major sectoral groups to arrive on agreement towards achieving a zero debt regime. The then committee was chaired by a broadcasting veteran and Fellow of the advertising profession, Alhaji Ayodele Sulaiman.
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