In an ideal world, your clients would always pay on time, meaning that when it comes to your payroll, wages would be paid without a hitch. But all it takes is for one customer to fall behind with an invoice and suddenly the shortfall could put your entire business cash flow under pressure.
Recruitment factoring could be the solution you need to maintain a stable bank balance, pay staff and meet overheads. The way it works is simple; when you issue an invoice to a client, up to 90% of the invoice is paid to you almost straight away by a factoring company. This company is then responsible for collecting the invoice from your client, which it keeps as repayment for meeting your invoice in the first place. All parties are happy; your client is happy as factoring eliminates those potentially awkward conversations from their relationship with you, the factoring company receives its money and you are able to run your business smoothly as invoices are paid straight away, minus the small fee.
There are a number of factoring companies on the market and it can be difficult to work out which would be best suited to your recruitment or staffing business. This is where a good recruitment factoring broker comes in. Our expertise and experience enables us to recommend a funding provider which specialises in this type of factoring and can offer you a tailored solution, allowing you to focus on recruiting new staff and working with clients instead of worrying about pay day!
Recruitment factoring can also help with other services such as credit control and ledger management. It tends to be more competitively priced than bank overdrafts or loans, making it ideal for businesses which need an injection of capital to take on new staff and develop.