Why overhaul and restructure our introducer compensation plans?
- Our new commission structure brings AR Cashflow’s product offering in line with Northern Hemisphere debtor finance and factoring models. It is a result of consultation with both local and North American participants.
- Australian Debtor Financiers, Invoice Discounters and Factors have not historically recognised the value that consultants bring to the table. AR Cashflow has tested engaging and rewarding a more involved approach to cashflow financing.
- The results are clear. When independent consultants are engaged by clients, they generally experience less pressure, faster growth and more effective results.
- Introducers will enhance the long term value of their franchises. Introducers will be meaningfully encouraged and rewarded for working in conjunction with us and clients after transactions are closed and funding commences.
- Currently most discounters pay a small upfront and small trailing commission to introducers, it is not enough to warrant ongoing assistance in ensuring the client experience is optimised for the best outcome.
What is the new commission structure?
- Introducers will be paid a full 10% of all gross discounts generated for the life of each facility.
- With some debtor financiers, sometimes there is confusion as to what the commission is based on. This new structure is not 10% of our margin generated above the Westpac borrowing costs. It is 10% of the full amount of all discounts generated. For example, if a client is quoted a minimum contract investment of $1,000, plus a daily discount of 0.033%, then the introducer will be paid 10% of $1,000 plus 0.003% per day of the face value of each invoice financed (should the discount be calculated on the face value of the invoice). The commission is not then discounted by our borrowing costs. This is a big difference to how most commission structures work here in Australia.
- Upfront application fees will be split down the middle with introducers to provide for assistance in structuring transactions correctly. In summary, this is a 50:50 split.
Who qualifies for this type of arrangement?
- Specialised Debtor and Cashflow Finance brokers.
- External or Outsourced Chief Financial Officers, usually engaged by SMEs to assist with growth challenges. Our arrangement will assist in compensating external CFOs for the time spent navigating clients through cashflow challenges.
- Business Turnaround specialists. Consultants involved in the corporate restructuring and rescue of SMEs. This may include accountants.
To learn more about these changes or why we have changed, please give me a call on 1300 652 158.