Article published on: 2/01/23
For many business owners, the beginning of a new year offers a change to evaluate the past year and set goals for the forthcoming one. If last year wasn't the best, now is a great time to plan for a more successful one.
If you are looking to grow your existing temp agency, a focus on cash flow is essential to ensure your plans can be achieved fully.
Cash flow is essential for business success, but by the nature of the industry and its structure, temporary recruitment agencies can be adversely impacted by long client payment terms. This coupled with candidates' weekly payment terms, a steady stream of income can be hard to maintain.
Agencies are heavily reliant on clients settling invoices on time, but even with this client compliance, agency's day-to-day operations and growth can be significantly halted.
Various options are out there for temp recruiters, it is just a matter of researching and securing the most suitable solution to secure appropriate cash flow. Short-term business loans, credit cards or overdrafts are all options but these can carry more risks and substantial additional charges.
Invoice financing companies can advance funds quickly and more cost effectively, raising finance against outstanding client invoices. Money can be received then well before a client actually settles their invoices, often as swiftly as 24 hours.
Obtain new business
Invoice funding can allow agencies to have the time to grow and take on new business with the confidence they can do so comfortably and without the burden of extra debt. As an agency owner you have to wear multiple hats, the success of your business depends on your ability to wear those hats. Having the ability to quickly adapt to upcoming opportunities, heavily relies on readily accessible capital and being organised in your day-to-day processes.
Attract bigger clients
To enable you to go after the larger contracts, you may well need additional staff to make it possible. Invoice finance can open-up access to funds you wouldn’t usually have and often offer more beneficial terms.
As your client portfolio and staff numbers increase, so does the ability to access additional funds, allowing you to expand as you wish. Maintain a realistic budget to manage additional associated costs and track business expenses closely.
Reduce admin stress
There is considerable work involved for smaller companies to chase payments, which can be a large drain on resources. An invoice funding company can take over this area for you, taking on many of your admin duties, freeing up your time to concentrate on agency development and expansion.
Teams can support you collecting monies due, allocating remittances and payment to your sales ledger. In addition, detailed management analysis information can be provided regularly, so you are always fully in the picture and able to make the most informed decisions.
We can help with your recruitment finance questions, contact us on 01827 438065 or drop us a line on info@flo.co.uk
