Lock-up periods are a significant issue for some professional services firms, with the The Good Bad Ugly 2017 report of the Australian accounting profession showing an average of 77 days.
A lock-up period measures the amount of work in progress (WIP) days and debtor days taken before payment is received.
Findex chief financial officer Matt Games says Crowe Horwath has gone from 76 days in June 2015 to 49 days as of June 2017 and has plans to drive the days down further with a new client payment platform.
The platform, built in conjunction with NAB and accounting software provider Reckon, has been on a slow rollout since June 2017, allowing for credit card payments, with direct debit functionality launched in November.
Over the next six months, the firm will be aiming to release its next phase of recurring payments, while looking at their own fee funding, in a bid to bring the service in-house.
Findex head of credit, Charlie Kurtonal, said that while the platform has been adopted in the banking sector, there has been limited uptake in the accounting industry.
“It is definitely a new process to professional services especially in the accounting industry because they heavily believe in paper-based invoices, they believe in delivering the invoice with the completed work,” said Ms Kurtonal.
“We looked at our business and we were still accepting cheque and cash and payments that we know aren't going to lead us into the future so we designed the portal.
“We're fairly confident with the next few phase roll-outs that we have planned with the portal, our days will only come down because it will make it quicker for clients to access their bills and review it, and if there is a dispute or if there is a query about it, they can make that straightaway.”
Ms Kurtonal said that while other firms have introduced similar payment functionality, it does not reconcile the payment and the invoice in real time.
“We know in the industry it's not an end-to-end process,” said Ms Kurtonal.
“They may have a portal but it doesn't reconcile with the invoice and it's not an end-to-end process.
“We haven't heard of anyone that has come up with this technology, we'd be keen to hear about it if they have.”
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.