Poor cash flow is one of the leading reasons staffing agencies fail. If you continually have unpaid invoices piling up, or you spend a significant amount of time chasing customers down trying to get them to pay your team, you need a smart solution that offers your business faster access to your money.
Payroll funding, also known as invoice factoring, is an intelligent solution for businesses that want to spend less time chasing down their money and more time providing the goods or services your customers are excited about.
Payroll funding is an easy way to gain access to up-front cash without taking out a bank loan. Here’s how it works.
First, you sell your goods or products to your customers the same way you always have.
Then, instead of waiting for your customers to pay their invoices, you sell the invoices directly to us. We pay you the majority of what you’re charging your customers up front. Your customers pay us directly, and once we’ve received payment, we deduct our fee and pay the rest of the invoice to you.
There are several reasons invoice factoring can help your company:
- More Predictable Cash Flow: Temporary staffing agencies often struggle to meet payroll needs. One reason is they might offer 30-, 60-, or 90-day payment windows. Unfortunately, these long payment windows make it difficult to pay your own teams on time because you never know exactly when money will be coming to your company. Some customers will pay early, some will pay on time, and some will pay late or even need to be chased down. With invoice factoring, you receive the majority of payments up-front. This allows you to know when money is coming in and plan things like payroll and bill payments accordingly.
- Reduced Payment Liability: Invoice factoring means that your company is no longer responsible for collecting payments from customers who don’t want to pay in a timely fashion. You are guaranteed the up-front cost of your invoices, even if the customer never gets around to paying their invoice. Any phone calls or reminders that need to be sent to your customer will come from our company, so you never again have to worry about chasing down late payments. And you can always count on receiving a portion of your payments, even for invoices that end up going into collections.
- Expedited Administrative Tasks: When you use payroll funding, you spend less time on mundane administrative tasks like tallying invoices, determining which invoices have been paid and which are still outstanding, and calling customers about outstanding payments. By outsourcing these administrative tasks, you allow yourself to spend more time doing the other hard work your company requires.
- Guaranteed Money Up Front: If you’re in a situation where you need money fast, payroll funding can be an easy way to acquire that money. Bank loans can take time to be approved and be difficult to receive. Payroll funding is comparatively simple, allowing you to sell your invoices to receive the money you need to fund essential company projects.
If you’re interested in learning more about payroll funding, contact our company today. We’re happy to walk you through the invoice factoring services we provide and help you determine if this system of improving your cash flow will work well for your company.