When LogoSurfing.com turned over some accounts receivable tasks to an outside company, it didn’t only keep its clients happy by preserving their preference for the traditional invoicing process, it also found a new way to free up cash.

LogoSurfing.com, a distributor of promotional items and custom apparel, began using a service from NowAccount a few years ago, which takes on the invoice processing—and risk assumption—of those clients who prefer to pay bills through invoices rather than other means, such as credit cards.

The service provides the distributor’s client companies the terms they prefer via the invoicing process. But it also gives LogoSurfing.com something much more valuable, CEO Matthew Watkins says: capital. “Sometimes it might be 45 days faster than the client would have paid,” he says.

Within 18 months of starting with NowAccount, LogoSurfing.com increased its cash by tenfold, Watkins says. In addition to passing off the invoicing process to NowAccount and gaining more working capital, LogoSurfing.com improved its Dun & Bradstreet credit score. “Our D&B score is through the roof,” Watkins says. A high Dun & Bradstreet score opens the door to gaining better payment terms from his own or new and larger suppliers, he adds.

Companies like LogoSurfing.com that sell to small and midsized businesses or government entities find an advantage in NowAccount’s services, says Kim Humphreys, vice president of marketing and business development at NowCorp, which operates NowAccount.com.

“Most business and government customers do not want to pay with a credit card and would rather receive an invoice with payment terms,” Humphreys says. “NowAccount works like and costs the same or less than accepting a credit card for payment, but it allows commercial or government customers to continue to receive their supplier’s invoice and pay according to their own schedules, with no late fees or penalties.”

Once a company like LogoSurfing.com signs on with NowAccount, it can designate which of its clients NowAccount will manage with invoices. Watkins doesn’t include clients that already pay invoices in a few days or by credit card.

NowAccount pays its client 90% of each invoice within five days of sending the invoice to its client’s customer, and pays the remainder 30 days after sending the invoice. NowAccount therefore assumes the risk by paying the invoice, and the account holder assumes the bill came from the supplier, NowAccount says.

NowAccount charges a flat rate per transaction, based on the terms of the invoice: For net payment due in 30 days the fee is 2.5% of the value of the invoice, for net 60 days it’s 2.75% and for net 90 days, 3%. The transaction is still between the client, in this case LogoSurfing.com, and its customer, with payments flowing through a new post office box or electronic account number managed by NowAccount. That means the end customer doesn’t know about the intermediary. “Our client pays that flat fee,” says Lara Hodgson, CEO of NowCorp. “Their customer doesn’t know we exist.”

NowAccount offers businesses dual benefits, Hodgson says. “We aggregate capital and risk management into one portfolio. It’s what credit cards did 50 years ago,” she says. “Prior to credit cards, retailers used to fund consumers with house accounts. When credit cards came along it was a way to better manage risk.”

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