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Look Who’s Getting into the Invoice Financing Game

Businesses often deal with extended payment terms and late payments as a component of customer engagement. While every business would love to receive payment upon receipt, most will tell you that’s not the reality. Chasing payments and following up multiple times are common accounts receivable and collections practices for businesses trying to make payroll or looking to fund the next big customer order. There are solutions to these issues, but what if there was a solution right under your nose? That may very well be the case now that QuickBooks is getting into the invoice finance game.

QuickBooks has recently introduced Get Paid Upfront, a solution that allows eligible QuickBooks Payments customers to receive advanced payment on outstanding invoices. According to Intuit’s QuickBooks website:

“Get Paid Upfront is an invoice financing tool that allows you to request earlier access to invoiced funds by receiving an advance on your unpaid invoices, making your invoice payment terms feel like Net Now.”

Get Paid Upfront allows for relatively easy access to payment and more opportunities for businesses to maintain a healthy cash flow.

The Details of Get Paid Upfront

QuickBooks Payments customers can apply for Get Paid Upfront for qualifying invoices. Businesses can choose their invoice to be funded, apply for advanced payment within QuickBooks, and receive access to funds within 1 to 2 business days. There is a small fee involved which equates to a percentage of the total invoice. For example, rather than receive an entire outstanding invoice payment of $1,000, the supplier will pay a 3% fee and receive access $970.

Using Get Paid Upfront is the equivalent of receiving a loan from QuickBooks and similar to other forms of invoice financing but without customer involvement.

The process does not interfere with the business relationship between the supplier and the customer, as the customer will pay the outstanding invoice according to the original term. If the supplier repays their Get Paid Upfront loan within 30 days, no interest is incurred. If the repayment extends beyond 30 days, the loan will begin to incur interest. In addition, the total outstanding amount can be repaid in 12 monthly installments at a specific rate.

What’s Driving Get Paid Upfront?

The launch of Get Paid Upfront is a brilliant idea by Intuit, as it squarely positions them in the early invoice payment space previously occupied by banks, factors, and rising fintechs.

The solution allows Intuit to use some of its cash reserves, or it’s access to funds at a significantly lower rate than the fees paid by users of Get Paid Upfront, to generate more cash.

Get Paid Upfront leverages Intuit’s extensive financial services expertise. In 2021, QuickBooks processed $91 billion in payments volume with approximately $1.5 trillion in invoices created each year. In addition, QuickBooks Capital has facilitated $1 billion+ in loans targeted to small businesses in the last five years.

Get Paid Upfront enables Intuit to secure greater market share of small and mid-size businesses considering alternatives to QuickBooks.

To be eligible for Get Paid Upfront, businesses must exhibit the following:

  • An invoice history
  • Business transactions within QuickBooks
  • Transactions within a business bank account
  • Maintenance of active payments subscription
  • Updated business and personal credit profiles

Businesses should check QuickBooks’s Get Paid Upfront website for more details.

Others Getting into the Invoice Payment Game

QuickBooks’ Get Paid Upfront is not the only company rolling out an early invoice payment initiative.

Facebook’s Invoice Fast Track Program launched last year as a test, with plans to roll out a more extensive program. Small businesses owned by women and minorities can now take advantage of the invoicing program offered by Facebook, anticipated to reach approximately 30,000 small businesses with minimum invoice amounts of $1,000. Facebook is committed to allocating $100 million to support women and minorities in buying their unpaid invoices.

Facebook’s program started as a means to help small businesses bounce back from the pandemic when more suppliers were struggling financially.

What Does This Mean for Suppliers?

The more options suppliers have for early invoice payment, the better. Competition breeds improvement and non-traditional companies getting into the early invoice payment game is good for suppliers and good for their customers.

Compared to traditional banks, suppliers now have fewer restrictions and greater opportunity to finance their operation.

Small and mid-sized businesses are increasingly open to non-traditional methods of financing their operation. QuickBooks Get Paid Upfront provides a needed alternative to deliver cash to businesses and a way to ultimately strengthen the supply chain.

Ernie Martin is Founder and Managing Director of Receivable Savvy. He brings over 25 years of experience in financial supply chain management, marketing and communications and draws upon his extensive experience to share knowledge and best practices with AR professionals. He previously chaired the Vendor Forum of the Federal Reserve Bank of Minneapolis and his resume includes time at several well-known brands and companies such as Tungsten Network, Delta Airlines, CIGNA Healthcare and Georgia Pacific as well as a number of years as an independent consultant.

 

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