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What happens when you put three somewhat competing vendors in a room with 3 potential clients? Great conversation and solution sharing!
I was able to moderate a Receivables Management Panel during Scaling New Heights 2014. The panel members were Meredith Wood of Funding Gates, Brandon Cotter of ZenCash and Yuval Ariav of Fundbox. Since all three of these companies are somewhat in the same space I was expecting pretty lively discussions and positioning of each individual company as the best at what they do and as providing the best solutions. I also thought we may even see some fireworks and some chair throwing (not really). Fireworks maybe, but not chair throwing.
What was expected to be a good crowd of attendees based on the topic, turned out to be a crowd of 3. That’s right. 3 people showed up to learn some great options about receivables management. That number was disappointing considering that these vendors offer real solutions to solve real problems that many of the attendees at the event either have in their businesses or have clients who are struggling with these problems.
So what is a Publisher turned moderator to do when his session turns out to be lightly attended? Write about it! So what follows is my best effort at sharing with you, our audience, the information that was shared during what became a roundtable session.
First let me identify the “players”:
Meredith Wood is (* was) the Chief Community Office for Funding Gates, which offers their FG Receivables Manager which help companies (or firms) manage their Accounts Receivables process via a QuickBooks Integrated Dashboard.
Brandon Cotter is the Founder of ZenCash, which offers white label Accounts Receivables management, including “gentle” nurturing of the client relationships to prevent outstanding balances from going to collections.
Zuval Ariav, CTO, FundBox, which offers a credit solution that delivers funding based on the creditworthiness of your business and that of your clients. The company uses proprietary algorithms to determine the creditworthiness which in turn sets the lending rate.
In addition to the 3 panelists, we had 3 participants, who will remain nameless for the purpose of this article, but their input and questions will be used.
Participant : Accounting professionals are not known for their desire to pick up the phone and engage clients when it comes to asking for money that is owed. If we were using your services, would you help us learn how to make collection calls, give us the tools, or what? What do I say to my client? How do I train them to pay me?
Wood: We believe the most important thing is to understand the goal of your collections call. Set that up front and then you will have a framework within which you can work.
Cotter: We deal with both types of clients (outsourced and training). Some firms like to keep it in house and some want to outsource it. Depending on what you choose, we provide the training and learning tools needed to make the process successful.
Ariav: Communications are key in training your clients to pay you. We also find that it is critical to include very specific terms in your engagement letter or whatever contract you have with your clients. You also need to keep your relationships with your clients strong and establish early on that you (someone) will be calling if the bills are not paid.
Participant: My firm does more integration work. Not accounting work. We consult with many clients that are doing that type of work who are not getting paid, and that ends up delaying our payment.
Cotter: We hear that all of the time. Educating your clients on how you are going to work with them is key.
Ariav: I completely agree.
Wood: Invoicing is part of the process, but there are many steps to getting to a good position with A/R and it does begin with education and communication. Most accounting professionals want to serve clients, not deal with A/R, so depending on how your business is set up, either of the three vendors on this panel can help with you’re A/R needs. We each have a different solution that ultimately leads to the same conclusion --- higher pay rates.
Ariav: It sounds terrible, but the only thing worse than working with a Fortune 500 company is working with someone who is working with a Fortune 500 company. When it comes to A/R, the problem starts at the top and trickles down.
Wood: Consistent follow up from the beginning of the relationship changes the outcome to a positive from a negative. Someone mentioned earlier that if the client knows you (or someone) will be calling, they are more likely to pay you before someone who isn’t going to be calling.
Participant: I am from a small town and I probably work with half of the businesses and a quarter of the families in town. It’s like Mayberry (from Andy Griffith). Receivables are tough because these are friends and people you see daily in non-business settings. I am trying to take my business from good to great, but receivables make that very difficult.
DeHart: It sounds like our panelist can help you with that, depending on how your business is structured.
Participant: Agreed. I’d like to know more about each company’s pricing structure.
Wood: At Funding Gates we offer a Free account for the ProAdvisor. We charge your client $19.00 per month, or $15.00 per month when paid annually, and extend a 15% discount to the clients you refer.
Cotter: We also offer a free account for the ProAdvisors. Our managed product where we actively manage the client relationship is based on the number of open accounts we are managing.
Ariav: Our product is free for anyone to use. We basically offer an advance on unpaid invoices. The rates typically range from 9.5% to 23%, depending on the credit worthiness of the account associated with the invoice.
Participant: Do any particular market segments offer more problems than others regarding collections and bad debt?
Wood: Wholesale suppliers, construction, manufacturing and creative agencies are the longer payers and higher risk market segments.
Cotter: I agree with that.
DeHart: Unfortunately, we have run out of time, so I’d like to give the panelist an opportunity to share a closing word.
Cotter: I’d like to encourage participants to talk to your clients about this opportunity to reduce their days outstanding. Our solution is very effective, cost efficient and easy to implement.
Ariav: Our solution is also effective. We are looking for champions, not resellers, so I’d like to encourage anyone who has clients who struggle with cash flow to contact us for a demo of our service and see how we can help you and your clients.
Wood: I am glad to be doing what we do. All of our companies have helped keep businesses in business. As for Funding Gates, we are looking to connect with accounting professionals who want to help clients stay in business and would like to encourage anyone who needs an AR solution to contact us to hear what we have to offer.
(There were more comments and other questions woven throughout the conversation during the hour, but the information provided above represents the key takeaways from the session.)
Like I stated earlier, no chairs were thrown and I’d like to thank our panelist and participants who were involved in the conversation. I also would like to encourage you, our audience, to reach out to these companies if you are having collections issues with your business or if you have clients who are having problems. Each of these companies offers a unique solution to an ongoing problem. You owe it to your business and to your clients to see if either has a solution that will fit your needs. The respective websites are:
* Meredith Wood is no longer with Funding Gates.