Professional Fee Funding
Professional Fee Funding is a pay by the month option that accounting firms can now offer their clients. It's designed as an alternative for clients that are more than willing to pay fees, but may not be able to meet the payment terms of your invoice.
Practice Agreement With NSF
The strength of Professional Fee Funding is an agreement signed between your practice and NSF. In essence by signing the agreement:
- The practice undertakes to remit any unpaid fee balance should a client default with repayments.
- We undertake to automatically pay accountants on any client contract from $3,000 to $50,000. (Fees less than or in excess of these limits can still be funded after consultation with us).
The Professional Fee Funding Concept
Some clients pay promptly and are happy to do so. But others prefer to apply the principle of spreading the expense of larger bills over monthly payments. Business clients are no strangers to monthly commitments: rents & leases, loan repayments, insurance premiums and usual overheads.
Further, in today's cash flow sensitive business environment, the ability to spread expenditure over manageable monthly payments is a preferred option for many business owners and managers.
The Professional Fee Funding Process
Like all products recommended by NSF, Professional Fee Funding is very straight forward. The process involves the following:
- Automated quote and document production software - can also be emailed.
- Your client signs basically 3 documents plus applicable tax invoices to be funded: The Offer to Borrow Money to Fund Professional Fees (inc's Direct Debit) & 1st Payment deduction authority and the Privacy & Consent Form which incorporates the Funding 'Terms & Conditions'.
- All signed documents are forwarded to us.
- Payment of the invoice is made to you within 5 business days of our receiving the paperwork (this can be accelerated by faxing or emailing prior to posting originals).
- Payment can be made to you by either electronic transfer or cheque, depending on your preference.
- Direct Debit is mandatory with this product & we will Direct Debit your client's nominated bank account monthly for the required term, (alternate nominated Debit date can normally be accommodated).
- Deductions include an interest charge, and the first deduction includes an 'industry standard' administration fee.
Examples of Fee Funding in Action
Fee funding is not just for traditional accounting fees. The facility has been utilized for consulting fees on special or one off projects such as:
- Strategic planning and business development work.
- Business Plans.
- Feasibility Studies.
- Due diligence on business sales or acquisitions.
- Provision of accounting staff on-site and in a client's business for an extended period of time.
- Funding for work in progress.
Why we believe in Professional Fee Funding
Managing a business cash flow is paramount in today's world. Professional Fee Funding will assist your clients to achieve this result, rather than using overdraft funds or other cash resources that could be better utilized in their business.
Just as important however, is the need for accountants to improve the collection time of client fees. For too long firms have suffered from clients being tardy with their account payments & using the firms as their bank. Now with our assistance, firms have the ability to collect fees at the first instance instead of allowing fees to slowly accrue to 60 days then 90 days and beyond.
Many businesses today already use this type of funding in managing their cash flow.
How We Can Assist
We will provide the following:
- Assistance with the implementation of the funding into your firm.
- Staff Training to ensure all partners and staff have a full understanding of the facility and software package.
- Dedicated telephone support.
For your Practice:
- Reduces outstanding debtors.
- Increases the capacity of the practice to do more project work for clients, because there is now an affordable way to fund the work.
- Improves your cash flow.
- The opportunity to essentially out-source your debtor management for those clients who decide to fund.
For your Clients:
- Avoiding large lump sum fees - a dramatic beneficial effect on clients cash flow.
- Consistent with other services that many clients pay by the month, eg: Insurance Premiums, Workers Compensation, PAYE Taxation, certain Licenses & Registrations.
- Another line of credit, without the traditional credit hassle.
- Putting the conserved cash back into the business.
- Funding offer is a GST free product ( GST is in the clients Tax Invoices for your Professional Services ).
- Interest on the funding is in most cases 100% tax deductible.
For further information, or to organise Professional Fee Funding for your firm, please contact us.