Finding employees can be a process. Employers need to spend valuable time and money advertising the job and interviewing potential candidates. It’s an exhaustive process that takes an employer’s time away from other essential tasks. That’s where staffing agencies come in.
If you run a staffing agency, you know the importance of matching employers with the right candidates. You also know how critical cash flow is. Waiting for your customers to pay their invoices can put a strain on your bottom line, which can stifle your growth and cause other issues. One common solution is to use invoice factoring.
What Is Invoice Factoring?
Invoice factoring is a common solution for businesses that typically send their customers invoices. With it, you sell your unpaid invoices to a company known as a factor, and they advance you upwards of 85% of the total amount. After your customers pay the factor, you receive the remaining balance minus fees.
What Are the Benefits of Invoice Factoring for Staffing Agencies?
Factoring offers several benefits:
A Simple Process
Applying for a traditional business loan is an arduous process. You have to meet strict standards and supply a substantial amount of documentation. With factoring, the process is much easier. The application is shorter, and you require fewer documents.
Not only is the application shorter, but the entire process is much faster. With traditional loans, it can take weeks or months for your approval. Then it can take up to a week to see your funds. With factoring, you can typically get approved in less than a week. After approval, you can start submitting invoices and get your money almost instantly.
Factoring doesn’t require you to take on more debt. Instead, you leverage your unpaid invoices. The factor provides you with a set percentage right away, and you get the rest after your customers pay what they owe. The company only takes a small percentage of the total.
More Consistent Cash Flow
Poor or uneven cash flow can harm your staffing agency significantly. You need a steady stream of funds to run your business. You need money to pay bills, pay your employees, and advertise your services. Invoice factoring can help to keep you afloat during more challenging times and give you what you need to grow.
Is Invoice Factoring Right for You?
If your staffing agency is experiencing cash flow issues, factoring can help. It can provide you with a quick source of working capital that can help you achieve your business goals.