Cohen and Krass is a multidisciplinary practice based in Sydney. Since 2002 Cohen and his solicitor business partner have specialised in providing accounting, legal and business advisory services for SMEs and high net worth individuals.
“We work with people who are hungry to build their businesses, and we act as a virtual CFO for SMEs to set up financial improvement systems,” according to Cohen.
“The SMEs we work with are the type who have good credit risk but don’t always have the clout to say to their large business customers ‘pay me sooner’.
“We connect our clients, who include builders, professionals, distributors, wholesalers and retailers, to cash flow funding from a range of trusted funding partners, including Scottish Pacific and the Big Four banks.”
Why invoice finance?
“In many instances for our clients, invoice finance (also known as debtor finance) is an unknown quantity. They are good at what they do but might not always understand the financial options so they’re hungry for expert advice, and willing to pay for it and follow it,” Cohen says.
“A recent example of a client we introduced to ScotPac is a small business, with $300,000 turnover, battling cash flow issues.
“With debtor finance providing them 80% of the value of their invoices up front, and 20% after on average 70-80 days, we showed them how they could improve their cashflow quite dramatically.
“We suggested that the owner use the extra cashflow to develop internships to help him manage his growing business and for the clear space he needs each week to work on the business rather than just work in it.”
“That $300k business is now using debtor finance and is regularly saving a few thousand dollars on interest payments yearly by utilising his debtor finance instead of an overdraft or credit cards. That’s a small business that now has an extra $10-$12,000 in cashflow a year in the bag to fund their growth plans.”*
“Magic wand” to improve cash flow
What keeps Tony’s clients up at night is their cash flow worries.
“I say to them, “what if you had a magic wand to wave to improve your cashflow?” and of course they say “wave it!”.
“Invoice finance is a great way to do this – it may not be at face value as cheap as taking out an overdraft, but it grows as you grow and it doesn’t use your home as security. This always eases the burden on the wife or husband, knowing the house is out of the equation. It introduces flexibility in funding their business’ growth.
As well as being a qualified accountant, Tony has experience in commercial corporate banking, insolvency and reconstruction, and is passionate about SMEs having clear and achievable strategic business plans. The right finance is a key part of this equation.
“I ask new clients how they are funding their business, and often it’s by using credit cards to pay the business expenses. That’s not cheap finance. The cost benefit for debtor finance far outweighs the cost of their current funding.”
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*Savings will be dependent on each businesses’ individual circumstances