In the staffing industry, it’s typical for clients to take 30 to 90 days to pay. This long payment cycle can easily put a strain on a staffing company’s finances, which can expose them to more bad debts and client loss. If you’re also struggling with this cash flow problem, factoring for staffing might be the solution you need.
For this post, we discuss how staffing factoring works and how your own company can benefit from this convenient financial solution. Keep reading to see how this service can be a game-changer for your business!
What is staffing invoice factoring?
Staffing invoice factoring or payroll factoring is a financial service where staffing companies like yours can sell outstanding invoices to a factor like ours for a small fee.
Instead of traditional payments that take weeks, we will fund your staffing invoice in as fast as 24 hours. This way, you’ll get an advance on your invoice amount by as much as 97% while we collect the outstanding balance from your customer.
Once your customers have paid, we will send you the remaining amount with our fee already deducted. This way, you’ll have a steady working capital to pay salaries and other operational expenses.
So, how does factoring staffing invoices differ from simply taking a bank loan? Aside from the fact that loans have interests, banks typically work with established staffing companies. And if you’re still trying to get your small company off the ground, factoring would be a great opportunity to achieve a steady cash flow.
Benefits of invoice factoring for staffing companies
As someone working in the staffing industry, you know fully well that you can’t just keep on waiting for payments to arrive. At the same time, chasing your customers to settle their dues is often time-consuming.
But with the help of factoring companies for staffing like Factoring Express, your business will enjoy the following advantages:
1. Quick access to funds
With our factoring services, you can turn your pending invoices into instant cash. Instead of waiting for up to 90 days, you can receive your much-needed working capital in just 24 to 48 hours.
Through this, your staffing business will have a steady cash flow, giving you peace of mind over your finances. It will also let you cover all your financial obligations without having to go out-of-pocket or taking another loan.
In general, staffing agencies are required to pay their employees twice a month, with some even weekly. But if your clients take 90 days to settle their invoices, you’ll be in a tight position to meet payroll.
Good thing, you can always explore factoring as an alternative to traditional collections. While you’ll pay a fee, it’s a small investment toward having a steadier and more reliable source of capital.
2. Avoiding bad debts
Staffing agency factoring companies also help preserve your credit lines. We will fund your invoices, so you won’t have to exhaust your chances to take a loan and shoulder yet another hefty monthly fee.
At the same time, we also provide free credit checks on your clients to ensure that they have a good payment history. This way, you won’t end up paying back the advanced amount in case you’re in a recourse staffing agency agreement.
3. Better relationship with clients
Reliability in payments is crucial when running a staffing business. Late salaries and failure to meet your financial obligations with stakeholders will negatively impact your reputation. It may also lead to client loss, which will further strain your cash flow.
Aside from that, factoring allows you to accommodate extended payment terms among your clients. This way, you can continuously provide them with excellent staffing and HR solutions without suffering from financial constraints.
Also, the instant availability of funds allows you to meet all your obligations while having enough resources to take on new clients. In the long run, this spells growth for your staffing company.
4. Scalable and flexible funding
Another great thing about factoring is it offers funding that grows with your business. For example, here at Factoring Express, we have a huge capital to ensure that you’ll get instant funding on any number of invoices you want to sell to us.
Aside from that, our factoring service doesn’t require a long-term commitment. You’re free to choose which invoice you want to factor, and whenever you need instant funding.
5. Guaranteed funding even with poor credit score
Unlike bank loans, we don’t require a good credit score for you to qualify for factoring. Instead of checking your staffing business’ credit score, we value the creditworthiness of your client more.
Basically, we want to ensure that your client on the invoice has a good payment history. It’s a protection for you and us by minimizing the risk of non-payments. This way, you can confidently meet payroll, expand your operations, bring in more clients, and offer more human resource services.
6. Suitable for staffing companies across industries
Whether you’re offering staffing in the security sector, IT, healthcare, education, and whatnot, you always have factoring services at your disposal. If you’re providing staffing solutions for a unique sector, feel free to contact us today, and let’s discuss how our factoring services will fit your needs.
Common questions staffing companies ask us…
Do I qualify for staffing company factoring?
If you’re struggling with delayed payments from clients, then you can definitely try our factoring services. You can always reach out to us if you have questions or want to learn more about our services.
Do you require any minimums for your payroll factoring?
No, we don’t impose any minimums or long-term contracts when working with staffing companies. You can choose the number of invoices you want to factor with us, and we will fund it as fast as possible. Also, we don’t charge termination fees, so you’re free to go if you no longer need our service.
How much do you charge for staffing factoring?
At Factoring Express, we offer rates as low as 1.99% for staffing companies who wish to factor their invoices with us. But if you need a more accurate estimate, call us today, and our specialist will provide you with a quote.
What if my staffing client didn’t pay the invoice?
If your client fails to pay the staffing invoice you factored with us, there would be two possible scenarios: recourse and non-recourse.
With recourse factoring, you’ll be liable to pay us back the amount we advanced on your invoice. However, if you’re under non-recourse terms, you won’t be demanded to return the funds.
Don’t worry because we always exhaust all means to collect your invoice to avoid any financial burdens on your part.
Turn invoices into cash quickly with our reliable staffing factoring
In an industry known for its lengthy payment cycles, staffing factoring can be a powerful tool for enhancing your cash flow. This way, you can keep your employees and clients happy while growing your business at the same time.
If you’re ready to experience better cash flow for your business, contact us at Factoring Express today! Our factoring company can fund your payroll invoices in as little as 24 hours – no need to wait for weeks!
