Michael Ratner and his daughter Sharlene feel good about the business they formed and have run successfully for the past eight months. In fact, they feel good about most things. And so they should. Their company, Compendium, has the exclusive Australasian rights to a US range of cleverly designed, high quality inspirational, feel good motivation products – business cards, gifts and books. Neither of them has to look very far for a reason or little quote to carry them through the every day small business dramas, particularly the onerous, time consuming task of invoicing, account monitoring and getting paid. Mr Ratner has been in small business in Western Australia for the past 25 years, has an unblemished credit record and has some rather strident views about banking sector service. He consulted a couple of banks about opening a new business account for Compendium and also wanted some cash flow and accounting advice. “I wanted to see a commercial or business manager. I didn’t want to borrow any money, but I did want to develop a relationship with the bank with the view that I might need growth capital in the future,” Mr Ratner said. “When they discovered I didn’t want to borrow any money, they weren’t interested. I left the bank with the clear impression that it did not know what it wanted in a client.” The cash flow and invoice problem remained. However, Mr Ratner must have consulted one of his many uplifting card collections or books that urged a wider view and he spotted a St George Bank advertisement for cash flow financing. Those of us who have been around a while used to know it as factoring. Compendium has embraced it with open arms. Basically, it releases cash which is owed on unpaid invoices, frees users from having to chase payments and maintains a full sales ledger administration for the business. St George has provided Compendium with a million dollar facility limit and the two have established a simple routine that leaves Mr Ratner free to pursue his largely computer and trade show based marketing and advertising. Sharlene draws up the invoice and sends one with the order to the client and another to St George, which pays Compendium 80 per cent of its value electronically to the company’s account. When the balance is paid, that also goes straight into Compendium’s account. St George provides daily, weekly and monthly reports, makes the collection calls, carries out company credit checks, and maintains a specific database that includes all Compendium’s client histories, payment and contact details, all available on line to check the company’s financial status. If an account is not paid within 90 days, the amount is deducted from Compendium’s available funds, but St George continues the collection process. Mr Ratner said that has not happened yet. There is a service fee, which runs between 0.5 and 2 per cent of turnover and interest is only charged on funds drawn from the facility, similar to an overdraft and comparable to those rates. Charges are only paid on the funds used. No real estate security is required and as the debtor ledger grows, so does the availability of funds. St George Financing cash flow finance state manager Adrian Hall told WA Business News the increasing acceptance of this form of financing was demonstrated in the growth of the value of invoices sold in Australia up from $10 billion to $35 billion in six years. Mr Ratner discovered the US Compendium company several years ago while running his Entrepreneurial Business Centre, which he sold about five years ago. The more than 20 products in the range vary from simple cards with quotations from the greats such as Shakespeare to books on surviving life’s major events. Then there are the oddities such as Lunch Mail. Shaped like tiny lunch bags, they contain pop up cards with words of encouragement that parents can drop in their kids lunch box. Mr Ratner’s latest marketing venture is to customise many of the products for the corporate sector.
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