Small and medium-sized businesses are more likely to have cash flow problems than big companies. Whether you’re just starting out or have recently expanded, your expenses may be growing exponentially, but the money isn’t coming in quickly enough to cover it. If your clients are not paying your invoices for 30, 60, or 90 days, and you are a staffing company you may have trouble making payroll, and that’s a real problem. That’s where payroll funding or staffing factoring in Alpharetta comes in to play.
What Is Payroll Funding?
To fund your payroll expenses for this week, you can use a variety of financial products, such as loans or a business line of credit. Instead of taking on a short-term business loan, it might be better to consider invoice factoring instead. When you send your invoices to a factoring company, you can get paid quickly, often within 24 hours. While the factoring company collects money from the client, you have enough cash available to pay your employees and taxes, and cover other operating costs to stay in business.
Grow Your Company
As you land bigger accounts and fulfill larger orders, you’ll start sending out larger invoices. Invoice factoring can help you grow your business faster because you don’t have to wait very long to get paid. Many businesses end up failing because they tried to get too big too quickly and ran into cash flow problems because of it. With invoice factoring, you’re always able to meet your short-term cash needs without having to get approved for a loan.
Improve Your Cash Flow
Many business owners pay attention to their balance sheet, keeping a watchful eye on their assets. Unfortunately, not all assets are created equal. While unpaid invoices are considered assets, they can’t be quickly turned into cash. If your payment terms dictate 90 days or longer, then your business could be having serious cash flow problems even though the balance sheet looks fine. It’s important for businesses to be able to cover their monthly operating expenses. Invoice factoring makes this a lot easier because it turns your long-term assets into usable cash.
Make Payroll Every Time
Would you want to work for a company that doesn’t pay you on time? Probably not, and most employees feel the same way. If you can’t pay your employees on time, whether that’s bi-weekly or twice a month, they will find another staffing agency to work for. Without your employees, your company can’t stay in business and handle the placements that you have. With payroll funding through invoice factoring, you can make payroll every time.