ProFee can lay claim to the axiom, “Necessity is the mother of invention.”

Since the late 1980s commercial insurance brokers had successfully used insurance premium funding as a client payment option. Our sister company is an insurance broking house and one day when arranging premium funding for an accountancy firm’s PI insurance, the senior partner bemoaned his own debtor’s ledger.

That comment struck a chord. We researched several other practices as well as a sample of our own business clients’ attitudes towards their accountant. In particular, we focussed on whether a fee payment program, similar to insurance premium funding, would suit.

Researching accountants:

• Accountants have a very high regard for their clients, particularly clients’ financial well-being.
• Partners / Principals often find it difficult to follow-up on outstanding fees, particularly if the practice is aware of a client’s circumstances.
• A program of letters and phone call follow-ups, whilst necessary, was time consuming and still very reliant on the client’s good will.
• The practice overdraft was carrying a hefty percentage of their Clients and therefore under pressure itself

Researching clients

• Most clients trusted their own accountant implicitly
• Delayed payment on almost all occasions did not relate to any issue of dissatisfaction
• Some reluctance to seek additional advice / services (issue of affordability)
• Some evidence of delaying payment to suit own cash-flow demands
• A payment instalment plan would be a welcome option. This was especially so amongst clients who used premium funding.

But the moment of truth was looking at our own experience.

ProFee’s Managing Director John Devaney:

“I can recall several times when our firm needed our accountant but we had difficulty in paying their fees, only because we had other demands on our cash flow. When we commenced our insurance broking business back in 1987, fee funding was non-existent. We had the perception that we couldn’t afford our accountant’s advice, so we bumbled through ourselves. Did we make some mistakes! And of course, the more mistakes, the more inefficient our business became, the more money we lost / expended. It became a vicious circle. We struggled in those early years. As our brokerage business grew, I believe we had by experience, developed a mind-set that our accountant could afford to wait for payment, as we always seemed to have some other priority.”

“Fast-forward 12 years. We had just completed some initial work on fee funding when a merger opportunity with another Insurance Brokerage arose. We needed advice on our business plans, cash flow projections, corporate structures, due diligence and above all, negotiations with our bank. This time we used ourselves (and our willing accountant) as guinea pigs and put the project up to Lumley Finance as a pilot fee-funding program.”

“The difference was phenomenal. The process was now affordable. But more importantly than that, because we felt that we had paid our way, we didn’t hesitate to liase frequently with our Accountant as we worked through the merger project. Our accountant admitted later that he felt his own mindset / attitude towards us became more favourable because we had paid his fees so promptly. In fact, he said that we had in one stroke, jumped onto his “A” Client List.”

In 2000, ProFee was set up as a separate entity from the insurance broking business.

By late 2003 ProFee had established consultants in every mainland Australian State as well as an alliance in New Zealand and was dealing with over 250 practices.

In early 2004, John relinquished his CEO role in the family’s insurance brokerage to concentrate on the development of ProFee.