Tripled Revenue and Saved $150,000 Annually by Eliminating Invoice Factoring Fees

Strategic Transformation of the things that Ben and the Profit Doctor brought to our attention in terms of managing the team, setting expectations, getting clear vision and goals, core values, all of those things in addition to those CFO pieces, which was the financials, the factoring, the cashflow, the collections, all of that culminated in over the past three years, our revenue has almost tripled or more than tripled. And so we could not be happier with our experience with Profit Doctor. Cameron. I'm the COO of Monroe and Weisbrod, a staffing and recruiting firm. We're a boutique agency, so I wear a lot of hats, which means I'm in charge of the finances, the operations, and even the technology, among other things. Getting our collections process underway was a huge improvement in how our cash flow flowed. Before we had a good system in place for escalation, and when to reach out, and how often to follow up, and when it gets escalated to the next level, and then when do we start pausing services or even threatening to pause services in order to get our clients to have the urgency we needed with paying their invoices really improved our cash flow. For a while, we were carrying a big balance on our line. ⁓ paying extra interest that we didn't need. So getting all of that kind of tightened up and giving those processes a setup, then we didn't have to think about it as much. We're gonna have to focus on it. We knew what to do when a voice hit a certain stage, and that was because the cash started rolling in; our interest expense went way down. The real cost of invoice factoring comes when you look at it on an annual basis. The fee is pretty small per invoice, but I think when you look at how much you pay in fees across a year versus how much you borrowed at any given time, dividing that up, the interest ended up being like 25, sometimes 30 % annual interest, which is basically just using a credit card to fund things. So that was a huge moment when we were able to sit down and look at it in that way. When trying to transition from factoring to a bank line of credit, the first thing was that we needed was some working capital in-house on our balance sheet. But tightening up the cash flow, reducing how much we were borrowing at any given time, and increasing how much we had on hand to lend ourselves, so to speak, really helped get us to a position where then we would go talk to a bank. and get a line of credit. CFO Course was our biggest year yet, both in revenue and gross margin and bottom-line net income. We grew our balance sheet rather than just maintaining. So with that increased profitability, we actually have some equity and some capital in-house now that we could use to offset that factoring balance, to borrow money to fund our receivables, or to fund our payroll. So just in a general sense, everything is so much better. load is lighter on the company. Hey, I'm Cameron. I'm the CEO of Monroe and Weisbrot. It's a staffing and recruitment firm. We're a boutique agency. And so in my role, I kind of handle a lot of different hats, but that includes the operations, financials, and the technology. Before working with the profit doctor, our business was growing, but not as fast as we wanted to. And ⁓ we're kind of drowning with what to focus on. What's the next lever to pull? What's the next thing to do? I think what prompted us to enroll in the Profit CFO course specifically was that we didn't have a lot of understanding of what we were looking at when we were looking at our finances. were looking at our financials. They were so long. There were so many details. We weren't really sure what to look at, what to focus on, or even what to glean from it. There's just not a lot of clarity inside the financial side of things, although we were growing and increasingly profitable at that point. Before the Profit CFO course, our financials were... There, and our books were clean. The entries were entered, and the information was correct, but it was, I think we sent an email out to the owners or the management with just the P &L, the balance sheet each month, and nothing ever happened with it because it was so detailed. There's so much info to see, and we were just going off the sales dashboards and our sales tools, what kind of revenue was? So, financials were present, but not usable in any sense. Having legible and readable financials makes the world of difference when we sit down each month to discuss what happened and where we want to go. We can look and see now exactly what's kind of driving the revenue. Why did these expenses jump so much? Where should we focus the next two, three, or four months to really increase that bottom-line net income? It was huge. Some of the tips were small things, just moving where lines lived, but they immediately made it clear What was happening? There wasn't any mental math to remember what happened. ⁓ With those clean financials, we could then compare month to month way easier than we could before. Once we were really looking, now, factoring. ⁓ It's a small fee per invoice, but when you really look at the numbers across a year, and it's cleaned and simplified, you realize the effective annual interest rate is insane. And it made a lot of sense back 10 years ago when the company first started, and there was no capital in the company, but ⁓ looking at a growing balance sheet, looking at growing revenue, seeing that interest fee just skyrocket based on every invoice we sent out was really eye-opening and kind of gave us the kick in the rear we needed to go explore other options. Yeah, our banker was, when we approached a bank and started talking to banks about getting off factoring, many of them had said they had never seen it done before. One banker said he knew of one company that did, but they had to declare bankruptcy and start an entire new company ⁓ just with a line of credit, just to get off factoring because it was so impossible. And getting off factoring saves us, could save us about $150,000 a year, which could be three more salespeople to go out, which would be double our sales team right there. It would free us up to do bigger projects, take bigger risks, or even offer better terms. Yeah, I specifically did the Profit CFO course and ⁓ doing the Profit CFO course, and I found that just rearranging a couple of line items, minimizing, simplifying the P &L, while it's actually less ⁓ quote unquote, accurate for what a bank would want to look at. It is so much more useful for us to make decisions, for us to decide where we want to put our focus on in the next quarter, next year, ⁓ next five years.