E-commerce businesses need to be thinking very thoughtfully about cash flow management. Cash flow is key because it determines how much you can invest in inventory versus how much you can invest in other things like advertising.

One of the best ways to maximize your cash flow is by extending how long you have to pay your vendors, including your advertising partners like Meta and Google.

How to pay for your advertising

Ad platforms offer multiple payment options. The most common options are paying via credit card, ACH, debit, and invoicing terms.

Credit Card

Credit card payments are the simplest to set up and most common. You enter your credit card information, and the platforms automatically charge the cards when you hit a threshold.

Pros:

Using a credit card is simple and offers two additional benefits.

Cons:

The downside of using a credit card is that most ad platforms will max the total amount you’re able to spend on your credit card before transitioning you to either ACH / Direct Debit or invoice terms.

Also, the platforms are billing in increments of $1,000. That means if you spend $200K in media on Facebook, you’ll receive 200 charges that your accounting team will need to reconcile.

ACH / Direct Debit

Another payment option is ACH / Direct Debit. When using this payment method, the platforms credit a direct link to your bank account. When payment is invoiced, they automatically debit your account to pay the outstanding balance.

Pros:

The benefit of using ACH / Direct Debit is that it is automatic and does not have a payment threshold. This means you’ll receive one invoice monthly.

Cons:

However, when using ACH / Direct Debit most invoices are due on receipt; which means you don’t get the benefit of payment terms.

We generally recommend against using ACH / Direct Debit because of the impact on cash flow.

Monthly Invoicing

The final payment method is monthly invoicing. You have to apply to be accepted for monthly invoicing, but once approved, you’ll receive invoices every month with 30-day payment terms. Your team will have to remit payment before the due date.

Pros:

The biggest benefit of monthly invoicing is receiving one invoice and payment terms. Monthly invoicing will make your CFO and accounting team love you.

Cons:

Monthly invoicing is not available for everyone. You have to qualify and apply to unlock monthly invoicing.

Also, when using invoicing, you forgo any credit card points or cash back that you would have received by using your card. However, we’ve found that the points or cash back received are never enough to offset the work required to reconcile all the payments.

Instructions for Using  Monthly Invoicing

Each platform has its own requirements and instructions for using monthly invoicing. We’ve outlined the key steps and watch-outs when setting up monthly invoicing for your accounts.

Monthly Invoicing for Meta

To qualify for monthly invoicing, you must have a Meta account manager. Once you have a managed account, you can apply for monthly invoicing.

Applying for Monthly Invoicing

Once you qualify for monthly invoicing, you’ll be able to request monthly invoicing in the Payment Method sections in your business manager.

You’ll want to go to the Payment Method section in your business manager, click “Add” and choose “Add a New Payment Method”.

You’ll see “Request Monthly Invoicing” as an option.

You should complete all required fields for the application and submit the form.

Once received by Meta, you’ll find out how much you have qualified for and can start using monthly invoicing immediately.

You can learn more about monthly invoicing from Meta here.

Monthly Invoicing for Google Ads

Applying for Google Ads invoicing requires following a few key steps and can sometimes be confusing.

To qualify for Google Ads invoicing, you need to have the following:

Applying for Monthly Invoicing

Once you qualify for monthly invoicing, all you have to do to apply is contact Google.

The team at Google will help you complete your application and let you know how much you qualify for.

After that, you’ll receive invoices by the 5th business day of the month. The invoices include instructions on how to pay.

Monthly Invoicing for Microsoft Ads

Microsoft Ads offers monthly invoicing using a two-part system. The first part offers a credit line for your business to draw on, and the second uses an Insertion Order (IO) system to manage the line.

To apply for monthly invoicing, you need to have the following (the requirements are similar to Google Ad):

Applying for Monthly Invoicing

The steps for applying for monthly invoicing are relatively simple.

First, find your way to the Billing & Payment section of your Microsoft Ads account. If you have multiple accounts, make sure you’ve selected the right account from the account selector in the top menu.

In the Billing & Payment sections, you’ll want to navigate to Payment Methods and select Apply for monthly invoicing.

At this point, you’ll click “I’m applying for credit”, which will allow you to complete the application.

Once your application is completed, Microsoft Ads will review it and let you know if your business is approved.

After that, you’ll be able to use monthly invoicing as a payment method.

Next Steps

Managing cash flow will be increasingly important in the coming months. Effectively managing cash will help you maximize your ability to grow and ensure you’re always able to invest in areas that will help scale the business.

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