Getting paid is the most important – and often the most difficult – part of doing business. When you’re issuing large invoices at the end of a job, professional fee funding services can help you and your clients manage payments more effectively.
Fee funding (sometimes called fee financing) allows you to improve cash flow and reduce bad debts. That’s a win for firms, and it gives customers more freedom to pay large invoices in manageable instalments.
The world of fee funding is revolutionising the way many firms do business. If you’re looking for a cash flow solution that benefits you and your clients, fee funding may be the answer. In this article we’ll explore professional fee funding in more detail and see how it can benefit your firm.
What is Fee Funding?
Obtaining professional services from accountants and lawyers can be expensive. Seeking expert advice is often out of the question for many, simply due to budgetary restraints. This can be a major hurdle, as these professional services play a critical role in managing your finances, and it may even hold you back from achieving your potential.
Fee funding is a payment solution that allows businesses and individuals to pay invoices that are issued by professional services (such as accountants and lawyers). Fee funding is essentially a type of short term credit. The credit provider pays the invoice up front, and then you repay the credit provider in smaller, more manageable instalments.
This allows you to improve cash flow and manage your money more effectively. Plus, it makes it easier to access expert support from industry professionals, which can have a major impact on your life and business. Depending on the provider you choose, you may pay up front fees and/or interest as you repay your loan. This allows the fee funding provider to make money for their services while breaking your repayments down into manageable chunks.
The Benefits of Fee Funding
Using a fee funding service is a simple and hassle-free way to pay large invoices issued by professional services. Fee funding comes with 5 major benefits:
- Improved cash flow – The invoices issued by professional services can be enormous. Paying a lump sum can be a serious challenge for a business. Instead, using a fee funding service means you can make small repayments over an extended period. This makes it easier to manage your budget and short-term cash flow.
- Increased customer base – Fee funding services work with both client businesses and the professional services that issue invoices. For professional services, engaging a fee funding provider can help you expand your customer base. Giving customers more ways to pay their invoice makes your services accessible to more people, and you’ll never be left chasing up debtors or non-paying customers.
- Greater customer satisfaction – Bill shock can be a serious hurdle for businesses. Although you’ve provided a high quality service, issuing a large invoice may put your customers off, or cause them to regret using your services. With fee funding, customers are able to spread out payments, which improves their opinion of your services.
- Grow your business – Being able to service more clients and leave behind a trail of happy customers is the key to growing your business. Not only that, but improving your own cash flow makes it easier to reinvest into your business, expand your offerings, take on new employees and meet increasing demand.
- Improved customer relationships – The way you manage client accounts and outstanding invoices can have a major impact on client relationships. By offering more payment options, you can improve your rapport with customers, and avoid the need for unpleasant interactions while chasing up unpaid debts.
Who Can Use Fee Funding?
Fee funding is essentially a service that works to manage invoices and cash flow between professional services and their clients. Most fee funding providers can tailor a package to suit:
- Businesses – Has your business sought help from a professional service? You may be able to pay your invoice using fee funding. This allows you to spread out the cost over a longer period of time and improve your cash flow.
- Individuals – Private individuals often need help from accountants and lawyers. As long as your invoice was issued in the last 12 months, a fee funding service will typically be able to help you with managing your invoice.
- Professional services – Accountants, lawyers and professional consultants should always consider working with a fee funding service. Providing additional payment methods is a great way to grow your business and reach new customers that would otherwise be unable to afford your services.
Fee funding is subject to income and credit tests. The requirements are typically quite low, meaning that fee funding is accessible to people from all walks of life. This makes it the ideal solution for both businesses and individuals that are looking to improve the way they manage their cash flow.