How to enhance your cash flow as a start-up recruitment agency

As you start to grow your agency you will be juggling different workers, timesheets, contracts, and invoices – this can be time consuming to manage and bad credit control can be costly. Loosing track of what money is going out and what’s coming in can leave you with gap in your cashflow and if you want to retain your bank of dedicated candidates, you need to efficiently manage your funds to ensure wages are paid on time and any issues are promptly dealt with. Here are 5 ways to help enhance your cash flow as a start-up agency.

1. Budget Management

Managing your funds and ensuring you have enough cash to meet any outgoing costs is crucial. For temporary agencies the need to pay agency staff on a weekly basis can often be the biggest expenditure. 

To gather how much you need to budget for each month, you first need to understand your outgoings and incomings.  

Your budget should record all outgoings to give you a total of how much you require each month, including: 

• Business overheads i.e. Building/office rent, bills 
• General business expenses i.e supplies, marketing, equipment, office phones 
• 3rd party tools i.e back office or payroll software/services 
• All internal and external payroll costs i.e. insurance 

2. Provide accurate timesheets.

Whatever process you use for collecting timesheets, whether that’s via a third-party recruitment software, or even paper timesheets, you need hours accurately imputed and signed off after each shift.  

Failure to do this can cause clients to get invoiced incorrectly, resulting in delays of workers hours/pay being processed, workers sick pay potentially being missed and if it happens frequently, the potential for bad client relations to arise.

3. Get your invoices paid on time.

Depending on your arrangement, your financer may chase the invoice for you, however you still need to invoice the client and hand over the details of the invoice to your financer.  

By agreeing clear payment terms, making your invoice clear and accurate, including the correct bank details, and by sending the invoice to the correct person in the business, will all help to ensure prompt payment. 

You should also carry out the required due diligence before supplying to a client, this will quickly inform you whether the company has good credit and can be a good customer.  If you work with a payroll management company, or alongside your financier’s in-house credit team, they usually will offer a credit check and the appropriate due diligence as part of their service.  

4. Choose the right finance partner for your agency.

It’s often 6 or so weeks before a client invoice is settled and the impact on cash flow in this time-period can be detrimental if you don’t have the funds to cover your worker’s pay.  

Finding the right recruitment finance solution for your agency is essential. A specialist finance provider should be able to provide your new business with up to 100% of your gross profit each week.

Some of the benefits of using a specialist finance provider include: 

• Time-saving processes – from processing your payroll, paying your candidates, raising your invoices, collecting payments from your clients and paying you your profits, a specialist finance provider can free up your time.  
• Tailored customer service - specialist finance providers have an extensive knowledge of the recruitment industry and already understand the nuances and complexities of running a recruitment agency.
• Flexible funding in sync with your sales- as your list of debtors grows, the potential amount of cash you can gain access to increases also.

5. Consider investing in an all-in-one specialist recruitment package.

A complete package designed to fulfil your back office and funding needs streamlines your entire administrative workflow. 

The best specialist providers offer: 

• Support and guidance from experts that know the industry and its challenges 
• Software that manages your admin tasks while keeping you compliant 
• A provider using a secure cloud-based system will make regular software updates and as well as supplying valuable support – providing security 

Whether its software, payroll, funding, or back office administration, FullFlo has it covered.  

From managing bookings and processing timesheets to training and support, we know that all the details in your business matter. Our back office offering also allows you to relax about all those time-eating administrative things – from cash flow to changing legislation, compliance management, credit control and HMRC reporting.  

Learn more about FullFlo here

We know that a service is only as good as the support that comes with it, so we make sure that the back office part of our FullFlo offering is an ‘open house’ for our clients.

You’ll have on hand a dedicated team to take care of:

• Flexible, bespoke pay-and-bill processes
• Timesheet processing
• Invoicing
• Ledger management
• Credit control
• Contractor payroll
• Management of supplier payments
• Daily bookkeeping
• Management accounts

And access to our seamlessly integrated cloud-based recruitment software and payroll system.

If you would like to learn more about how Flo can help support your new temporary recruitment business, you can contact us on 01827 438065 or info@flo.co.uk