7 min read

6 tips to manage client budgets more effectively

Allie Decker

Every business owner works hard to create a realistic, easy-to-manage budget. And no matter how experienced and talented you are, it's always challenging. 

Budget management is a balance between strong leadership and collaboration with other business partners. So what if those partners aren't your colleagues, they're clients?

Agencies, consultants, and contractors need an efficient and transparent process to handle client cash. They're trusting you with important projects and their limited funds, and they need to see how their investment pays off.

Your job involves more than just ensuring that your project team submits their deliverables. You also need to manage your clients’ project budgets so their money goes to where it’s supposed to go

At Omniscient Digital, we help clients achieve positive financial outcomes through content marketing, and we want our agency to do the same. Here are six keys to doing this successfully.

Note: We're a content marketing agency so will use marketing examples throughout this post. But the tips apply to any project.

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1. Sustain existing relationships instead of starting new ones

The budgeting process goes beyond crunching the numbers. Your client's budget is greatly affected by their suppliers. By sustaining relationships with suppliers and other service providers, you can enjoy preferential rates and lower operating costs.

Suppliers will offer discounts to your agency, knowing that it’s more cost-effective to retain you than to win new customers. 

For instance, if your marketing agency is working on a rebrand, you need to cover everything that your client has previously put out – from calling cards to websites. The latter part is tricky if your agency doesn’t have a full-stack web development team. But if you’ve worked with such developers in the past and maintained great relationships with them, it's easier to bring them onto each new project. 

Relationship management is critical to manage client budgets. A well-managed business builds a stable pool of preferred suppliers with a history of providing quality on-demand services and post-sales support. Creating stable relationships will also help your clients achieve a sustainable and long-term model of growth.

When managing supplier relationships, you need to set expectations. Your client probably won’t get discounts or freebies this year or the next. But if they're pleased with the supplier’s output, you can help them negotiate favorable terms for future projects.

2. Find the client's top priority and make adjustments

Small business owners often get stuck in the day-to-day problems of running their businesses. They forget the bigger picture. So before diving into budget specifics, help your client list their primary goals. Then use these as a key reference point when you prepare a budget together.

Knowing these goals will help you manage your client’s cash flow and implement their marketing budget effectively. You'll also keep team members focused on what they need to do to accomplish those goals.

To help your client keep track of their progress, you can break them down into weekly tasks. You can then allocate the financial resources needed to complete them.

Source: Corporate Finance Institute

You should also help clients tie the budget back to the overall company objectives. You can suggest that the first page of the budget lays out the financial or business goals you intend to reach. Your client should also align their business development strategy with their budget to avoid overspending.

Once the priorities are set out, you and your client can make necessary adjustments to suit the amount of work needed. This way, your client becomes a conscious spender.

It's crucial for all parties involved to articulate what can and cannot be done per the business's priorities. Honesty allows everyone involved to manage their expectations.

3. Communicate budget constraints

Communication is the foundation of good budget management. Throughout the project, you should constantly communicate all the budget constraints with your client. Maintaining open communication channels builds trust between you and the client and leads to a strong relationship. That will help you better manage client budgets, too.

Regardless of project size or scope, explain what's possible based on available funds. This way, you can avoid any surprises down the road and ensure that the client keeps their eye on their business goals and priorities. 

You can also work in phases if your agency has limited resources or funds. At Omniscient, we don’t do everything all at once. Instead, we plan activities around specific seasons or events so we don’t burden our clients with budget requests for projects that we don’t plan to start yet. Also, if a certain activity costs more at certain times of the year, you can do it some other time to save costs and replace it with another task that costs less.

All budget-related challenges need to be discussed with the client promptly to avoid any disappointments. Schedule regular meetings to discuss how their budget is spent, which tasks are due in the following weeks, and how much of your client’s budget is required for those tasks.

4. Provide a range of options

It's good to have a master plan. But you also need backup plans for any unforeseen events. Creating hypothetical scenarios with your client will help them develop the flexibility they need for implementing projects, regardless of the situation.

During any project, you'll encounter deviations and delays even when the scope is clear as daylight. To manage all these, you need to be skilled in change management. Evaluate the project at every stage, continuously. You have to know that each change, however small, could significantly impact your client's budget.

If an obstacle arises, discuss all possible solutions with the client before proceeding.

Some changes will have more impact on your budget forecasts than others. Minor adjustments to project scopes will have a more negligible impact on your client’s finances than larger change requests.

An example of a minor change in a marketing agency context would be a change of target keywords for SEO. This type of change takes less effort than a major change like a pivot to B2B when all you’ve previously created is B2C-centered content.

In addition, you need to consider the methods your clients use when working on projects. Traditional project teams that rely on the waterfall method, for example, can use traditional budgeting processes. On the other hand, agile-oriented businesses work best with Agile budgeting and forecasting methods. 

I feel that digital marketing agencies work best with Agile budgeting methods, as the market keeps changing and the client’s messaging has to constantly adjust as well. I also prefer charging a blended rate rather than breaking down the rate according to the roles played by people in project teams, especially for less complicated engagements like SEO or email marketing. 

Agile budgeting means allowing changes that affect the company’s finances to be included in the budgets and forecasts. An agile approach to budgets also considers any future changes that can occur. This helps a company to be prepared for any surprises. It also helps with making realistic budgets.  

5. Consider how you want to use your resources 

Most marketing agencies employ teams of marketing professionals, copywriters, designers, and web developers that work on different projects. As your business grows and you acquire more clients, you can no longer assign people to just one project at a time.

Instead, you need to block off their availability depending on the tasks that are due for different projects and the amount of work to be done.

In other words, you need to know how to assign work to specific team members and determine your budget based on who’s working on what project at any specific time.

Even though it's essential to stick to the budget, there should be room to make adjustments. Adjustments are justifiable when an unforeseen event results in a significant shift to the bottom line.

Even though they were't part of the original plan, you can incorporate them into your budget.

6. Save money in unexpected areas

Even after your budget is locked in, always look out for opportunities to save that extra dollar. You want to manage client budgets better, so be relentless in this pursuit. Your clients will appreciate that.

You can consider methods like Lean Sigma to save money. The Lean process focuses on minimizing waste and using as few resources as possible.

For example, you can take an inventory of the software deployed in the company and decide which ones are no longer being used. Getting rid of software clutter will help save thousands of dollars worth of subscription costs. 

[Note: good business budgeting software helps you spot irregularities and make timely changes.]

The budget process is more than just numbers. At every stage, you should always be alert. This way, you don't miss out on new opportunities, and you stay ahead of a potential delay.

And have these conversations with the client, obviously. They know their business better and can offer some insights you didn't have.

Wrapping up

With budgeting, it's vital to manage available resources wisely. That is crucial to the success of your client's business. Have frank conversations with your clients, and stay on the same page regarding goals and budgets.

See this as an opportunity to learn. This knowledge can be transferred and used in future projects. This way, you also become efficient at saving and dealing with any crisis. 

Your clients will be at ease knowing that you're on top of the situation. If the project is complex or you get overwhelmed, always seek help earlier than possible.

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Allie Decker

Allie is the Head of Content at Omniscient, a marketing agency that works with SaaS brands. Before working with Omniscient, she spent 5 years as a freelance writer and then joined the content team at HubSpot where she worked for nearly 3 years. She has contributed to more than 100 high-converting articles for HubSpot and collaborated with the folks at Entrepreneur, Hotjar, and Foundr. Her words are bookmarked by entrepreneurs, small business owners, and digital marketers worldwide.