Professional Fee Finance is an alternative payment method adopted by many accountancy practices across the UK and Ireland, but what is it about this facility that makes it unique? Within this article, Keys Finance will explore the role of Fee Finance and how it can be used to support your practice and your clients.
What is Professional Fee Finance?
Professional Fee Finance is a facility that provides an excellent cashflow solution for both accountancy practices and their clients. It allows firms to collect invoiced fees in full, whilst being able to offer their clients a flexible monthly repayment option. It can be used across the entire billing structure, whether you would like to introduce at the onboarding stage of a client, at billing or even to reduce debtor days and fund aged debt. The key benefit is you will receive 100% of your fee upfront, providing your practice with a boost in cashflow, offering greater flexibility for your clients and removing the hassle of chasing late payments.
Late Payments
Late payments are becoming an increasing concern for many businesses across the UK and recent findings released by the Office of Small Business Commissioner (OSBC) state "a third of all payments to small businesses are late, with the average value of each payment at £6,142. It's estimated that if timely payments were to occur it would boost the economy by an estimated £2.5 billion annually."
Clients may delay payment or have extended payment terms, which can put a strain on your firm's cash flow. Professional fee finance provides your firm with an upfront payment, enabling you to better manage regular cashflow, whilst also providing an alternative payment method to your clients, which will help mitigate the risk of late payments.
So let's take a look at some of the common myths of fee finance:
Myths of Fee Finance
- Fee Finance is only for clients who can't afford to pay upfront.
Fee Finance is used for a number of different reasons. Many clients can afford to pay these fees upfront, however they would prefer to spread the cost of payment and invest the capital in other areas of their business.
- Fee Finance is expensive and comes with hidden fees.
Fees and associated costs vary from provider to provider, and it is important for accountancy practices and their clients to do their research and choose a fee finance provider that offers transparent and fair pricing. Look for providers that offer fixed interest rates, no upfront fees, and no penalties for early repayment. Some also offer the facility at no cost.
- Fee Finance is complicated and time consuming to set up.
Setting up fee finance for clients can be a straightforward and efficient process, and many fee finance providers offer easy-to-use online applications and quick approval times, at Keys Finance, we usually can underwrite an application within minutes, with documentation issued to a client for signing, enabling payment to be made to the practice Next-Day.
- Offering Fee Finance will harm the reputation of my practice.
Fee finance is an industry-recognised finance option, endorsed by the ICAEW since 1999, and many clients expect it as an option when paying for their fees. It can often help improve relationships with your client by demonstrating you are flexible and understanding of their needs. This can help to build trust and strengthen your client relationships over time. Secondly, professional fee finance can help to increase revenue. By providing your clients with the option of financing their fees, you can increase the likelihood of them engaging your services. This is particularly beneficial for larger or more complex projects.
In conclusion, professional fee finance can provide a range of benefits for ICAEW member firms in the accountancy practice. From improving cash flow to increasing revenue and reducing risk, professional fee finance can help your firm to grow and thrive in today's competitive marketplace.
Find out more
To find out more about Professional Fee Finance you get in touch with ICAEW Member Rewards Partner, Keys Finance, who support member firms with their market-leading Next-Day Professional Fee Finance Facility. Visit https://keysfinance.co.uk/icaew.
Alternatively, you contact Adam Sharp, Marketing and Development Manager at adam@keysfinance.co.uk.