Staffing: The Fast-Paced Business
Staffing, itself, is known for being a very fast-paced business. It is, also, known to have an inconsistent revenue stream. It is a fact, every company needs to pay its employees on a timely basis and there is no exception to this rule. A customers’ priority is to make certain their bill is paid on time. Everybody needs and wants money. Factoring is, also, called payroll factoring.
This is a financing tool. It is a financing tool for staffing agencies. This tool has the ability to convert unpaid invoices into immediate working capital. The remaining balance is, then, given to the staffing agency. This tool will subtract the factor’s fees once the client has paid the entire invoice. There are many cash flow challenges that may need solutions.
About The Fantastic Financing Tool
Factoring is getting much attention because it is a unique financing tool for staffing agencies. Converting unpaid invoices into immediate working capital is, indeed, fantastic news for many. The Staffing factoring companies will, often, advance 85 percent to 90 percent.
They can work with a company and invoice up to 30,000 dollars a month. Often, it is possible to prequalify for this opportunity right online. This prequalification may be completed in a matter of minutes. This is, truly, a fantastic financing tool worth looking into.
Factoring: No Payments
It ought to be noted, factoring is not the same as a term loan or a line of credit. There are no payments needed with factoring. The receivables are sold. This may be at a discount factor. The customer will, then, pay their invoice by sending their payment directly to factor rather than to the business itself.
The business is, actually, selling their unpaid invoices to the staffing factoring company. The staffing factoring company is assuming the responsibility for the collection of the invoices. Most businesses view this shift in their billing responsibilities as another advantage to this payroll factoring option. This is one way to outsource the accounts receivable department.
Who Benefits From Factoring?
Factoring is very beneficial to staffing agencies. It helps them to overcome any cash flow management issues. This tool provides solutions. Any staffing company with 5,000 to 50,000 dollars per month of outstanding invoices will find this tool very useful and highly beneficial. The following agencies are known to use this tool:
- headhunters
- health care staffing firms
- general staffing agencies
- temporary agencies
- information (IT) staffing agencies
- human resources (HR) staffing firms
Factoring: The Vital Lifeline
Factoring continues to be an extremely vital lifeline for the staffing industry. Many agencies are not, typically, paid until the placements are working and at the job for at least two weeks. The executives, often, need to be at a job for up to three months. This has posed many issues for many businesses.
It has hurt many agencies who are looking to put contact workers and temp employees in an organization. The workers need to be paid. The usual, terms are 30 to 90 to the business they are working with. This is challenging for executive recruiting firms who may work on a small retainer. They will take the retainer and not know if they are even going to be paid.
Positive Feedback About this Tool
Factoring staffing has gotten quite a bit of positive feedback from satisfied users.
Omitting their online payroll obligation has proven to be very beneficial for staffing agencies.
Factoring has made the management of cash flow very uncomplicated.
Keep in mind, most recruiters work on commission only.