Building Stronger Cash Flow for Your Staffing Company
Learn Why Staffing and Recruiting Agencies No Longer Have to Wait to Get Paid on Client Invoices.
Cash flow is the lifeblood of staffing and recruiting firms. When forced to wait 30, 60, or 90 days for clients to pay their invoices, it can lead to a severe working capital shortage not just for day-to-day operations but could also have a detrimental effect on your staffing company’s ability to get more business, scale in size, and grow faster. The best decision you can make as a staffing business entrepreneur is to find a way to get paid on invoices right away, even when your client enjoys extended payment terms. If you’ve suffered weeks or months of waiting for inbound revenue, now wondering,
“How can I improve my company’s cash flow without going into debt or taking on more liabilities?”
Small businesses like Staffing and Recruiting Agencies improve cash flow without going further into debt by drastically reducing the time it takes to be paid on client invoices. Whether doing B2B (business to business) or B2G (business to government) transactions, a staffing company’s client invoice can be converted into cash flow. The most popular resources that help recruiters and staffers convert invoices into cash are the Accelerated Invoice Payment System, Invoice Discount Purchasers, and Invoice Factoring Firms.
Record-high inflation and ballooning material and supply costs have not only made delivering goods and services more expensive but forced the price of hiring and keeping high-quality employees out of reach for thousands of small businesses. Thankfully, staffing agencies and recruiting companies have stepped into the gap to fill a need in a wide range of business niches by providing more affordable pools of talent on a temporary or long-term contract basis.
Types of Staffing Agencies that Issue Client Invoices and Extended Payment Terms
There are numerous types of agencies that provide staffing services to businesses and to government agencies on the local, state, and federal levels.
- Temporary Staffing Agency– A company that works on behalf of another company needing temporary staffing for new or ongoing projects. Also, they work to support employment seekers ready for paying assignments. Temporary staffing jobs can last for as little as a half-day or run for months, even years, under an ongoing contract.
- Employment Staffing Agency– When business clients are completely satisfied with the quality of the individual doing the work, ‘Temp’ employment commonly turns into permanent employment for skilled, qualified candidates. Staffing firms that specialize in finding permanent employees, whether on a test-trial basis (before hiring) or for direct hire, fall under the umbrella of Employment Staffing.
- Accounting Staffing Agency– Maintaining an accounting department is a very expensive endeavor. Thousands of businesses of all sizes rely on agencies that specialize in finding, landing, and onboarding skilled, resourceful talent to handle Payroll, Controller, Bookkeeping, Billing, Accounts Payable, Collections, Credit work, and more.
- Medical & Nurse Healthcare Staffing Agency– Healthcare staffing companies help clinics, jails, hospitals, nursing homes, and other organizations providing medical services keep their labor pools well filled with qualified, reliable personnel. Nurses, CNAs, Medical Assistants, and various healthcare specialties use medical staffing providers to get a foot in the door of good companies.
- IT & Technology Staffing Agency– When businesses can’t afford to have computer repair technicians, software programmers, and software developers on payroll, they rely on IT & Technology Staffing Agencies to provide them with people to fill specific roles. Technology changes at such a fast pace that companies are eager to save money by borrowing the skills available through these specialized, highly competitive agencies.
Whatever type of staffing firm it is, the most successful ones strive to do business with other businesses and the government, and most of those clients work within a buy now, pay later ‘merchant credit’ arrangement. The trust extended to the client comes from a billing invoice issued upon delivery of goods and services. Once the invoice is issued, the staffing agency ownership has no choice but to wait for the client to pay, and that’s where cash flow problems can start.
The Biggest Cash Flow Obstacle for Staffing Firms is Unpaid Invoices.
For most staffing & recruiting agencies, inbound cash flow is the spring of life. Any aspect of daily business that restricts cash flow is a problem – even a liability – that can lead to a critical working capital shortage at the worst possible moment. Billing invoices sitting in your account receivable files are a burden on your cash flow for the duration of the payment waiting period.
Since many agencies offer extended payment terms to attract more business, the invoice may have a 30, 60, or 90-day wait. On average, 30-day invoices get paid 60+ days after issuing, with clients seeking even longer extensions. While your agency waits, your financial obligations do not slow down. Since a majority of your business bills don’t offer you extended payment terms, looking at stacks of unpaid invoices can be stressful. After all, your staffing agency needs accessible working capital on hand to take care of essentials like:
- Employee Wages & Salaries (including payments to other staffing agencies)
- Utility Bills (electric, water, gas, or solar)
- Real Estate Costs (building rents, mortgage payments)
- Office Supplies & Equipment
- Advertising & Marketing, Public Relations
Plus, in an inflationary economic environment with all business costs rising, getting your money faster means you can use it before it loses more purchase value.
When unpaid invoices cause your revenue stream to dry up to a trickle, you can quickly find yourself in a cash flow crunch with very little room in your working capital to handle day-to-day operations, let alone attempt to grow your business.
Despite the fact that your company uses every efficient means to get your clients to resolve their bills on time, today’s high-inflation economy makes on-time and early payments more difficult while increasing extended payment requests. With more clients seeking longer payment agreements, up goes the risk to both your cash flow and working capital position.
So, the best financial move you can make as a staffing agency entrepreneur is to find a way to get paid as fast as possible on invoices while still allowing your clients to seek longer terms.
Three Tools Staffing Companies Use to Get Paid Much Faster on Invoices.
Small business entrepreneurs are a breed apart, with staffing agencies among the thoroughbreds because no business works with as many different types of client niches. Without the work you do, businesses nationwide would collapse, and the economy would eventually grind to a terrifying halt.
You should not have to stress while waiting on extended-term invoice payments. As a staffing agency entrepreneur, the most empowering financial force in your business arsenal is immediate, ready, liquid capital.
- Factoring Invoices. Invoice Factoring Firms are those that will pay a percentage of the face value of your account receivable but will withhold the remainder until your client has fully paid the bill. This can delay the remaining payment by weeks or months while your bills pile up.
Numerous industry complaints over decades make some companies shy about factoring invoices for fear of hidden fees, disguised interest payments, high costs, and getting penalized and held responsible for any slow payment or default.
- Selling Invoices.
Digital giants now salivate to get their hands on your client data for their own profits, you will be required to submit all your client relationship information so that they can mine it and approve those clients most beneficial to them, not you. Staffing company owners who want to maintain independence from intrusive tactics used by Social Media giants like Facebook may want to read the fine print before getting involved.
- Accelerated Invoice Payments. The NowAccount Accelerated Invoice Payment System is the newest digital financial network technology designed and built by entrepreneurs for other small business owners.
This groundbreaking rapid invoice conversion tool is perfect for staffing agencies that cannot afford to wait 30, 60, or 90 days to get paid on invoices. NowAccount technology provides the benefits of almost immediate payment, the lowest costs, lowest risks, and it stands as the most financially empowering of the three.
Using the Accelerated Invoice Payment System to Eliminate Waiting for Invoice Payment.
Let’s use the following example to show how getting paid right away can change your entire cash flow trajectory so that you have the working capital space necessary to operate without stress and grow your business fearlessly.
If you currently wait the standard one, two, or three months (maybe more) to get paid, then you know some of the cash flow problems that can come with having too many invoices and not enough working capital. So, after doing the easy, simple qualification and opening your account, you begin to upload only the select clients of strategic economic value for your business. You discover some great things in the process:
- The NowAccount qualification process really is easy, simple, and fast, taking only minutes. No frustrating hurdles, no hassles about personal credit ratings, and complete privacy.
- Upon approval, your invoices are paid rapidly, within a couple of days rather than weeks or months.>
- There is no interest charge, nor is there any holding back on face value the way other systems operate. Instead, NowAccount only charges a one-time, small flat merchant fee, the way a credit card company does. This gives B2B and B2G invoice transactions a feeling of convenience, like taking a credit card rather than extended payments.
- No personal guarantees are required, nor is business collateral needed. NowAccount’s rapid invoice payment technology is not a loan or line of credit to be paid back. Instead, you’re just getting the money you’ve already earned.
- You will never be pressed into chasing down any customer who is slow-paying or who defaults. Your job as a collection agent is over because NowAccount takes on the burden so that you can focus on what you love to do without stress.
- You’re free to terminate the process of getting paid right away on invoices and return to the grind of waiting. Most likely, you will never want to return to the old ways, but freedom is there with no obligation.
Staffing agencies work in a flexible, fast-paced, rapidly changing business environment in order to meet constantly shifting client needs. Stodgy, traditional forms of raising working capital are not as accessible to maverick entrepreneurs, so using the resources on hand to boost inbound cash flow is a must. The standard way to prevent a cash flow crunch, keep business running smoothly, and continue to grow is to keep extended-term invoice payments on schedule. The best and most empowering way for your business, however, is to get paid as close to immediately as possible. NowAccount is your solution.
Eliminate the Wait on Invoices for Your Staffing & Recruiting Agency.
The longer you wait, the riskier and weaker your business position will be. It’s time to stop suffering from anxiety and stress, wondering where the next influx of capital will come from. Make use of the most valuable, unused asset at your disposal, your client invoices.
Get out of the waiting game, take the chokehold off your cash flow, and strengthen your working capital picture by taking the first step to opening your NowAccount today.