Purpose:

The primary purpose of the IPC Script is to assist the Financial Professional in making the presentation with the Executive in the Back Office of the business. Please note this should take about 20 to 40 minutes to share the Balance Sheet Enhancement Software with the Executive.

Objective:  

The primary objective is to provide the Balance Sheet Enhancement Software to a Prospect and share how the IPC product can help explain how their Balance Sheet can be enhanced by Selling a few Invoices.

When: 

The following script is to be used when making the presentation to the Prospectfor the first time. Usually, this is done in the Client's Back Office.

Script:   

Download the IPC:
Before beginning Downloading the IPC, you have to make sure Microsoft® Excel has the ability to accept Macros (Open Excel and go to Tools Menu and set the Macro Security Level to Medium). Once you have access to the Internet it takes only a few minutes to Download, Activate, discuss Migration and Features. Then you will be ready to share the mechanism that enhances Balance Sheets.

Customer Input:
Begin by asking approximately what is the Revenue of the entire Company and then enter it. Leave the Tax Bracket at 15% and Allowance for Bad Debts at 2% - they can change it later.

1. Ask who is the current Best Customer of the business and what was the approximate Revenue for that Customer last month, and then enter the Name and Monthly Revenue – they can examine the Aging Report later for the exact Revenue (so you will get an idea of the size of the company).
2. Ask about the approximate percentage of Revenue that represents the Variable and Fixed Cost and enter the percentages – they can change it later when they examine their Income Statement (use default % to speed up the presentation).
3. Ask about how long the Accounts Receivable is outstanding and enter the data – they can review the Aging Report later.

Invoice Buyer Input:
Explain how the Invoice Discount Fee is calculated – High Now – Lower Later. Next explain the Advance Percentage (change if desired) and how the Rebate Percentage is computed. Optionally, the Consultant can bypass the worksheet and come back to it later in the presentation.

Profitability Analysis:
We begin by looking at this worksheet by focusing only the 0% Growth Rate, because we did not set the Projected Growth Rates in the Customer Input Worksheet. Quickly (20 seconds) migrate about all of the pages. Work: Show Working Capital Investment decrease , Cash: Show Monthly Cash Flow improvement, Income: Income Statement – point out Tax Relief, Balance: Balance Sheet Enhancements – point out the enhancements, and finally, Home: Profitability Analysis Summary.

1. Work: This represents the Income Statement for the Customer where the Investment in Working Capital for the Cost of Goods Sold is inserted into the Income Statement. Notice the Variable Cost (Cost of Goods Sold) is the same for both Working Capital Investment Strategies. Point out the Investment is reduced more than the Loss of Revenue from the Sales Discount yielding an effective Net Profit.
2. Cash: This represents the Monthly Cash Flow for both strategies. Notice the difference in expenditures for the COGS in the Odd and Even Weekly Cash Flow. The receipt of Cash Advances offsets the Even Week expenditures. The point is, the average Investment in Working Capital is reduced dramatically, and the improvement in the IRR verifies that statement.
3. Income: This represents the actual Income Statement for the Customer where the Before and After Tax Profitability is shown. Notice the Sales Discount reduces the Profits from this Customer, and because of this, there are fewer Taxes due. In reality, the Tax Relief recovers a portion of the Sales Discount, thereby, minimizing the impact of the Sales Discount Fee.
4. Balance: This represents the Balance Sheets Enhancements when the Customer’s Invoices are Sold. The Cash Assets increase because of the reduced Working Capital Investment and the Tax Relief. Notice the Accounts Receivable is diminished because of the improved Cash Flow. Note the Balance Sheet is enhanced without incurring Debt. Those enhancements are approximately 1% to 3% of the Annual Sales Revenue for that Customer. That implies the paper Invoices are worth that value, provided the Invoices are Sold.
5. Summary: This represents the Financial Summary of the Sell the Invoices Strategy. The table shows a detailed summary of all of the Positives and Negatives for the Balance Sheet and Business Operations. Note: The same business is transacted with less Risk, due to the reduced Working Capital Investment. Wouldn’t it be great, if business could be conducted without any Investment? I guess we will be satisfied with less Investment instead.

6. Home: This represents the Balance Sheet Enhancements Cash Flow of the Sell the Invoices Strategy. The chart shows a monthly cash flow of all of the Cash Assets and Liabilities for the Balance Sheet for the entire. Note: The last bar represents the final Balance Sheetment Enhancement for the year.

There is your overview to Enhancing the Balance Sheet.
It is interesting to note that when the Working Capital Investment Risk is lowered, both the Margins and Profits increase. Wouldn’t it be nice if a business could lower their Risk Capital to Nothing and still maintain the same return? That is not likely to happen, but Selling the Invoices goes a long way to meet that objective.

Welcome:
What you have to do now is to look at your Income Statement and Aging Report to determine the actual Variable and Fixed Cost and the average Accounts Receivable Period for your Best Customer. Once you have entered that information into the IPC and are satisfied with the Balance Sheet Enhancements, then you should initiate a 3 Month Selling the Invoices Test to confirm the Balance Sheet Enhancements. All you have to do is, to go to the Welcome Worksheet and fill out the Selling the Invoices Application Form and submit it.