What is Focus Cfo's history regarding collections on accounts receivable?
Focus_Cfo Franchise · 2025 FDDAnswer from 2025 FDD Document
Accounts receivable are comprised solely of invoices to clients receiving CFO services. The Company continually monitors the balances and has a strong history of collections. Additionally, the receivable is offset by the accrued compensation payable to the franchisees and licensees for services provided to the clients. The payable is not paid to the franchisees and licensees unless payment is received from clients. Based on this, management believes the accounts receivable as of December 31, 2024 and 2023 are fully collectible and any estimate for loss is immaterial to the consolidated financial statements. When a receivable is deemed uncollectible, the Company uses the direct write-off method.
Source: Item 23 — Receipts (FDD pages 37–126)
What This Means (2025 FDD)
According to Focus Cfo's 2025 Franchise Disclosure Document, the company has a strong history of collections on accounts receivable. These receivables are solely from invoices to clients receiving CFO services. Focus Cfo continually monitors these balances. To further mitigate risk, the accounts receivable are offset by accrued compensation payable to franchisees and licensees for services provided to clients; this payable is only paid to franchisees and licensees after Focus Cfo receives payment from the clients.
Based on this approach, Focus Cfo management believes that the accounts receivable as of December 31, 2024, and 2023 are fully collectible. Any potential loss estimate is considered immaterial to the consolidated financial statements. However, when a receivable is deemed uncollectible, Focus Cfo uses the direct write-off method.
For a prospective franchisee, this indicates that Focus Cfo has a system in place to manage and collect payments from clients effectively. The risk of non-payment is further reduced by the fact that franchisees and licensees are only compensated after Focus Cfo receives payment from the clients. This alignment of incentives should encourage franchisees to ensure that clients fulfill their payment obligations. The use of the direct write-off method for uncollectible receivables is a standard accounting practice.