If you’re running a temporary recruitment agency, you’re probably concerned with generating enough cash flow – much like any other business would be. The unique challenge of running a temp agency is that you need money to advertise your services, pay your taxes and other operating expenses, and compensate your staff before you receive payment from your clients. The good news is that you can use invoice factoring services in Roswell, GA, to bridge the gap.
Covering Your Expenses
A temp agency has a myriad of expenses to cover, long before you can match a client to an employee on their first assignment. It takes a lot of cash to advertise your services to both clients and potential employees. You need money to cover the lease on your office space, and you have to pay for your staff. But the funding problems aren’t over when the startup phase is completed.
Even if your company has been operating for a while, cash flow problems don’t cease. Temp agencies only get paid after they match an employee to a position. And even then, the agency only gets paid a percentage for every hour your employees work. Additionally, you sometimes have to wait a long time for clients to pay you, depending on the terms you’ve agreed on.
Billing Your Clients
After your employees submit their timesheets, you can bill your client for the services they’ve provided. Unfortunately, most companies have payment terms of net 30 days or longer. However, you’ll have to pay your employees their hourly rate before the client pays the bill. This can put you in a real cash crunch, especially when you’re also using your funds to recruit new clients and employees. That’s where invoice factoring comes into play.
Invoice factoring is a rather simple process that speeds up your cash flow considerably. Instead of waiting for the client to pay your invoice, your temp agency can get paid within 24 hours of issuing the invoice. This means you can even use invoice factoring to pay your employees without having to get a business loan, recruit new investors, or default on taxes and other current expenses. A company that can’t make payroll is not going to be able to keep employees, temporary or otherwise.
Fortunately, invoice factoring can even help you grow your business because it frees up your funds for advertising. You also don’t have to worry about coming up with the cash to cover your operating expenses. In short, when you take advantage of invoice factoring services in Roswell, GA, you can grow your temp agency without worrying about cash flow problems.