Customer Stories

Working Capital

How One Accountant Is a Cash Flow Hero to Small Business Clients

upside accounting; accountant using calculator

“I look like a hero when I show them they can get them some much needed cash flow even if the big banks have said no. They think it’s too good to be true. It sometimes is the difference between them giving up and closing versus carrying on.”

Mike Widdis, Upside Accounting Tweet

Upside Accounting is an end-to-end accounting and tax solution for start-up and micro businesses primarily in the creative professional space. Founded in May of 2012, the business has four team members and serves about 60 regular monthly clients. Mike has also funded some of his own invoices with FundThrough to try out the service before recommending it. Read our Q&A with him to learn more about his and his clients’ experience with invoice funding

Q: How was Upside Accounting introduced to invoice funding? What was your first impression?

A: I was introduced to a traditional factoring company not long after starting Upside Accounting. The service was not easy to use because they made the transaction difficult. The first step was to coordinate an in-person meeting to talk over the deal and sign documents! It was a cumbersome, paper-based process with lots of back and forth. Clients also had some negative perceptions, but the fact is that SMBs need money, especially if they have large customers who make it tough to get paid quickly. It’s a great way to get cash on time.

Q: How do you identify clients who may need invoice funding?

A: When I’m on a sales call with a prospect and they say cash is an issue, I ask why. If they have low cash and high outstanding receivables, that’s a sign they could benefit. They know they’ll get paid, it’s only a question of when. While cash flow forecasting is useful, it’s tough to predict when invoice payments will come in depending on who my client’s customers are. I tell them it’s nice to have a plan if something gets pushed. After all, how many things got pushed because of COVID-19? 

While speaking with the last person I referred to FundThrough, I urged them to get something in place. If their payroll bounces, that’s a $45 dollar fee from the bank. If my fee bounces, that’s another $45 dollars they pay. In the end, it’s cheaper to fund an invoice. 

Q: When you first bring up invoice funding with a client, what are their top objections?

A: Having a bad credit score or a lot of debt; many have CEBA loans from the government because of COVID-19. They’re afraid they won’t get approved because the bank rejected them. My answer to that is to ask how they know until they try. A lot of the approval is on the client’s customer, not the client themselves.

Another objection is that it costs too much. Again, I mention how much bank fees are costing them because they’re not doing anything about their cash flow. The last client Upside Accounting referred to FundThrough considered going out of business over their low cash flow. Funding an invoice is definitely the better option.

Q: How do you see invoice funding as a trend playing out with accounting professionals?

A: One of the best ways to change their minds about invoice funding is to have them try it themselves. Accountants are inherently skeptical, as they should be. However, they have a duty to present all options to their clients, so it’s worthwhile to explain that when they have a client with a cash flow issue, invoice funding is a solution.

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