Paperfree

Like any new business, especially one that revolutionises an established way of doing things, the early years have been tough, with a number of cash flow challenges. However, with the help of ultimate, things are now on the grow.

The Paperfree story

“When BMW bought Rover back in the mid-nineties” explains MD Bob Smart, “they wanted to measure the competencies of 8000 staff against a national framework, without it interfering with productivity. I headed up the project, and developed Europe’s first ever e-portfolio programme for the assessment of vocational competencies.”

The business grew from there, and clients now include about forty FE colleges, eighty training providers, and a few blue chip clients like BT, Rolls Royce and the MOD.

“The best way I can explain what we do is with an example” Bob continues. “In 2003 completing Health & Social Care NVQ Level 3 took an employee 14 months, because they had to go to college and write up all their assignments on paper. With our system they use their mobile phone to video the work they’ve done, and to record a commentary — no paperwork! The quality was higher, evidence was richer, there was less opportunity for plagiarism, and people were completing the course in 9 weeks! The Audit Commission reviewed everything and said if our systems were applied across all the FE colleges in England it would save £1 billion a year.”

The pain of slow payment

Despite this success, cash flow was a real challenge.

“Many of my clients are colleges” explains Bob “and while they are not going bust, they take forever to pay — it’s public money, they have to follow procedures, and I can wait sixty or seventy days. I can’t sell stock, or materials, to raise cash. All I’ve got is a few staff, I can’t lay them off, but they need paying! So cash flow has been a major headache.”

“I started using an invoice finance company up in London, but they would only fund a small portion of the invoice, because there was no asset to secure it against.” Bob continues.

A breath of fresh air

“When I was introduced to Ultimate their attitude was different — hugely different. It wasn’t ‘you want ten grand, but what asset can we secure it against?’ They listened carefully, they understood my business model, they noted the fact I’d never had a bad debt, they realised my clients weren’t going bust, and they said ‘we think there’s a way we can help’. Their flexibility and creativity was so refreshing, and I thought ‘Wow, that’s exactly what I want!’”

“That relationship has grown over the last 6 years, and even when I’ve had a few problems, they’ve been fantastic. I had a major client who completely messed up the purchase order process, and the willingness of Ultimate to help was extraordinary. They don’t just say ‘no’ but ‘I’ll go and ask’...and they come back with an answer fast. The owners, the decision makers, are accessible — I can speak to them myself.”

“The service has been exemplary. The friendliness, the professionalism, the willingness to help...even if you can’t get hold of your particular client relationship manager, everyone else kind of knows your business.”

A whole new way of looking at Asset Based Finance

“In the past people would look down their nose at factoring” Bob smiles, “but they have a very blinkered approach — it’s not what they think it is. I don’t even regard it as finance. To me finance is a big fat overdraft at the bank every month. I look at Ultimate and I see a zero balance if I’ve taken my money out. They are just buying an asset from me, on a risk basis that we’ve agreed between us.”

“The way I look at it, I’m buying a service. I can outsource my admin, I can outsource my programming, why not outsource my accounts department? I can’t do as good a job in-house, it would cost me more money, and Hazel, at Ultimate, is much nicer than me on the phone, so I get great CRM as a bonus. I don’t have to send the nasty letters, make the nasty calls, and when I raise an invoice I have nothing to worry about — you can’t put a price on that! Even as the business gets bigger I’d be stupid to change that arrangement.”

A bright Paperfree future

The business is now going from strength to strength and Bob is delighted with Ultimate’s contribution.

“It would be fair to say, without their help sometimes, I’d be in a very different place - right now we’re really growing, with some very big developments coming to fruition, and Ultimate’s assistance has been invaluable.”