So Gary, my Publisher, sent me a questionnaire earlier in the week from one of the respondents to our invitation to participate in the Advisor Alliance series. I must admit that I had never really heard of, or more likely paid any attention to, “FundBox". So when I got the questionnaire I thought to myself, this isn’t the typical vendor I write about that is offering a partner program for some software they offer, or some accounting solution in the cloud, or even a utility program that works with QuickBooks. “What the heck is it?”. Then I thought, before I write an Advisor Alliance article about them, I should at least research who they are and what they do….right? I mean how many of you would have known what FundBox is if I had started talking about their Partner Program? So this is probably the first 2-part Advisor Alliance article of many more if Gary keeps coming up with companies that I have never heard of who are offering you, our readers, the opportunity to get in on the ground floor of something that could well, make your ‘day’, ‘week’, ‘month’, ‘year’ and business lifetime.
As a QuickBooks ProAdvisor, many of you are out on your own, you have a solo practice and haven’t yet even thought about doing much more than trying to handle your day-to-day work load, pay your expenses and make a little money. The telephone rings and someone is calling you because they either got your name from the Find a ProAdvisor website, or you were referred to them by someone they trust (perhaps a CPA or tax preparer). They need help with their QuickBooks for any number of situations; it might be set-up, or fixing things when the numbers just don’t look right. In other situations it might be because their file is really messed up, or they have grown enough that they need functions that they either can’t figure out how to use in QuickBooks, or that need to be added-on or into QuickBooks.
Now not everyone who reads Intuitive Accountant is a ProAdvisor, some of you are Accountants, Bookkeepers, and Business Consultants; but what we know is the majority of our readers are either in solo practices or small practices. A lot of ‘big guys’ are reading ‘something else’, and that’s OK, we both know what they are missing.
Well no matter what your practice, most of us ‘small guys’ (or gals) generally share a few things in common. We need to spend more time on our business doing what we do best, and less time on trying to get paid for what we do. Invariably, if you are in business long enough cash flow becomes a problem for almost everyone who is doing this for anything other than a hobby. We all have ‘to eat’ and ‘pay our bills’. Yet a few of those ‘clients’ who needed us so badly, way back when (it could be last week, last month, or a year ago) tend to avoid you like the plague when you are calling to try to find out when they are going to pay YOUR invoice for services rendered.
So the Accounts Receivable for your little solo practice are growing day-by-day, there is just one problem, the ‘aging on them’ is growing too. Sooner or later you are either spending your valuable time when you should be working for a living (to generate more AR), or your are spending your time trying to collect your AR, or you are wasting your time worrying about your AR, and if that goes on long enough your AR can turn your cash flow upside down and shut you down.
So you tell yourself that you can go down to the neighborhood bank where you have done business for years, long before you ever started your solo practice, and get a loan. NOT! They look at your QuickBooks Profit & Loss and just ‘laugh out loud’, and they get a Jolly St. Nick belly jiggle out of your Accounts Receivable Aging report, with a “you got to be kidding”. Hey the Bankers son may even be dating your daughter and he still gives you a “wish I could help you, but you just don’t qualify.”
But being the really nice guys they are, they give you an alternative, “why don’t you take out a home equity loan”; that’s right you can mortgage what little equity you have in the one true asset you have to bail out your non-paying Clients that make up what you are owed in your growing A/R aging. (By the way, would you like to buy some ‘swamp land’ in Gator Alley, while you are at it?)
The reality is that you can’t get a business loan, and you can risk everything to take on more debt than you can service with the income that you can’t collect when it is due. So I have spent a lot of time telling you what you already know; now what about what you don’t know…..this is where “FundBox” comes in.
FundBox is small team of scientists, techies and designers whose mission is to deliver business owners and freelancers the peace of mind they need to focus on their work instead of worrying about gaps in their cash flow. The people at FundBox believe in small business. In short, they believe in you as a small business, and (this is where the Advisor Alliance opportunity we will really talk about next week comes in), they believe in your small clients too.
FundBox believes that only you, the business owners can help your business flourish, and that you need to focus on your business, worry less about collections, and not stress over long term financing commitments that don’t make sense. They know that what you need is a little help from time to time to insure that you get money when you need it, and you need to know that it will be available when you need it.
The people at FundBox spent hours simulating various financial models and researching these issues, opportunities and methods and what they discovered was a unique way to help you out of your cash flow jams. You see, they understand that despite how good business may be in terms of your doing the work and invoice your clients, when your AR aging starts spanning 30, 60, 90 days, you are going to be hard pressed to do enough work ‘right now’ to make up for that sagging cash flow. On the other hand, if all your invoices were paid just as soon as you issued them, then you would probably be in a much better place; heck who knows you might even be able to afford ‘steak’ instead of canned tuna.
And the reality is that no matter what you do, a slow payer has no incentive to pay you. While you are waiting around to be paid, they are ‘eating steak’ on what they aren’t paying you, while you eat that canned tuna.
But FundBox offers an alternative; it isn’t ‘a loan’, but a different way of managing your cash flow. They don’t purchase your receivables, or use them as collateral; they simply ‘advance you the value of your outstanding invoices’ which you pay back with a clearing-fee over a 12-week period. In other words, instead of you struggling for 90-days to get what your client owes you, the FundBox advance allows you to continue doing what you do best, the work. If that guy who hadn’t paid you for the last 4 weeks and who had told you it would be another 30 days at least pays you in less time, you simply pay FundBox back early and they waive the balance of the scheduled clearing fee.
So about now you are wondering what this really costs, well their pricing model varies with the value of the receivable they advance against. I used their pricing page to calculate the minimum and maximum 3-month clearing fee on a $2200 receivable, the minimum was $109 and the maximum was $153. Only you can decide if you can afford such a fee in order to maintain the cash flow you need to stay in business, I can’t possibly answer that question for you. But this is also where I will mention one of the incentives of the Partner Program.
As a FundBox Partner if you refer a client to them who becomes a ‘qualified customer’ FundBox will pay you either $200 in cash or equivalent compensation as a discount on your own advances with FundBox. So perhaps you recommend that guy that couldn’t pay you to FundBox for his own open aging receivables, and he pays you from his FundBox advance, so you can then pay off your own FundBox advance with your clearing fee paid from your referral earnings. ‘Pretty smart idea isn’t it.’
So if you have never heard about FundBox, and you want more information, visit their website and be sure to stop by their booth at Scaling New Heights. And read ‘Part 2’ of Advisor Alliance – FundBox in next Friday’s edition of Intuitive Accountant when we explore the particulars of their Partnership Program.
This article is written for informational purposes only, and does not constitute an endorsement of the product, services, or provider discussed therein by either Intuitive Accountant and/or the author.