To Small Van Courier providing deliveries in Ireland.
To Small fashion importer and exporter
Most clients that use factoring companies for financing their recruitment agency are doing so due to a slow turnover rate in their accounts receivable department. It can be difficult for other industries to believe it, but recruitment companies or companies that tend to recruit often grow so quickly that they run out of working capital fast.
If you have completed the task but are still waiting for the work invoice to be cashed, you can quickly run out of the funds you need to pay your staff their share.
However, did you realize that top recruitment industries use factoring services on a regular basis? Like smaller companies, big corporate recruitment industries use factoring companies just as often; if not more.
More information on Financing Staffing Companies
The top 10 recruitment industries that use factoring companies to pay their employees on time are:
Although it may seem like a jump, many of these recruitment industries are finding that factoring companies give them the interest rates that take their books out of the red. Payroll aside, companies that recruit also take advantage of the credit protection extended to their customers by using factoring companies. After all, your need to get cash quick based on their invoice should not create awkwardness in your relationship with them.
IT Companies – These days, every business uses computers. When the computers are down, business is lost and IT companies are called to the rescue. Extra recruits are often brought on board by the IT company in order to get everything in working order. When the business is back online, a bill is sent out but the invoice is often more than the company has in bank reserves. In these cases, factoring companies create solutions for IT firms that will go out of business if they continue to wait for clients to pay on time.
Logistics – When it comes to handling a strategic operation from beginning to end, the goal is to complete the task with professionalism. Regardless, what the client usually does not understand is that these kinds of jobs frequently go over budget and require additional employees. In these cases, do not punish the client by calling frequently to remind them of their debt to you. Instead, professional logistics operations are relying on fast acting factoring companies to start covering expenses the same day the invoice is printed.
Manufacturing – It is important to seize an opportunity to grow your business when it is presented to you. However, if you do not have the working capital to hire and expand, you can be left dead in the water. Worse, getting a line of credit opened at the bank is often more trouble than it is worth. To get your business up and running from the get go, a factoring company is more than willing to give you an asset-based loan at reasonable rates. Once the job is done and payroll is complete, the loan is easily paid from your healthy profits.
Construction – While it does not happen that often, on occasion there are delays with a project that put your finances into chaos. Obviously, going without paying workers is not an option. Sadly, delays in construction usually mean a need to hire more recruits. Quite honestly, this happens too often and many of the top construction firms in the U.K. find it impossible to do business without a healthy relationship with a local factoring company. For all of the dark days associated with managing a construction firm, low interest quid that you can pick up the same day you need it is one of the best solutions when banks close their doors to you.
Warehousing – Just when you have all of your ducks in a row, a big storm destroys the roof of one of your main warehouses and requires all of the merchandise to be removed at once. Before the day is done, you must recruit new staff to help you move the merchandise to a different warehouse. Unfortunately, you are still waiting for your top client to send you a cheque for their most recent purchase. In order to have upfront payments for temporary workers and solve your repair issues (while the insurers twiddle their thumbs), a factoring company welcomes you and gives you cash that brightens your darkest hour.
Haulage – In the haulage market, there are unexpected clients that are willing to recruit your firm in order to clean up a mess created by another business. Too often, on-the-fly customers of a haulage firm do not have upfront cash to pay their invoices and expect you to recruit workers to complete their task anyway. In the meantime, you can keep your expenses out of the margins by employing a factoring company that meets your needs by extending you an available source of cash flow.
Distribution – When more product than you expected arrives at your doorstep, the details can get sorted out later while the merchandise needs to be sold today. As you are hiring packagers and drivers, you start to wonder where all of the money to pay them is going to come from. Before you encounter a recruiting disaster that you cannot control, consider how a factoring company will solve many of your problems for a low cost. While it may take a bank a week or more to get you the money you need, you can save yourself a lot of stress with an easy to facilitate factoring company payout.
Professional Services – Barristers, advocates, and other private services often find that their hard work goes unpaid. Instead of decreasing your work force, pass on your past due notices to a factoring company instead. This way, you will have the money you need to recruit workers and forgo the hassle of calling past clients to pay up. Whether you are a private doctor or other type of professional, a factoring financial service welcomes you into a myriad of problem solving solutions.
Media – A healthy media services firm has their hands in a lot of pockets these days. Every new project means hiring the best recruits in the business and giving money up front as their payment. Naturally, you take the bid for the job before the project is paid for and are left eating sandwiches from the cash and carry for the rest of the month. All the while, your new employees are meeting at the pub and you are left in the office feeling lucky to have a one quid lager. Fortunately, taking a bid today and getting paid for it within 24 hours is a reality with a factoring companies that extend their services to the media industry.
Couriers – More often than not, a courier service is hired to deliver and pick up in the company’s immediate geographic area. Despite this, there are special orders that are requested once in a Blue Moon. Instead of saying no to a courier delivery that extends from London to Constantinople, the smart business owner recruits the appropriate staff in order to please the client and get the job done. Regardless, following labor laws and ensuring that workers have every benefit afforded to them is pricey to say the least. In order to cover petrol costs and other expenses related to completing a courier task, a factoring company is happy to help make these types of financial arrangements possible.
In the end, there is plenty of evidence that shows how recruiting and factoring companies go hand in hand. No matter what kind of business that you operate, as long as you have a form of collateral or debt owed to you, you will have the money you need to continue doing business.
Unlike traditional banking services, a factoring company specifically works to fund payroll and provide growth for staffing companies that often temporarily employee workers. It is a system that many of the top firms in the U.K. rely on and one that helps smaller businesses gain an edge they need to get ahead of the competition.
If getting 90% of what is owed to you (with up to 8% added when the customer pays your invoice) sounds like a positive way to continue your recruiting efforts, your next step is contacting a factoring company that offers you the best rates. With your worries aside, you will wonder why you did not take this recommendation earlier.