Factoring Is the Way to Facilitate Cash Flow

Cash FlowOne of the most critical aspects of running a recruitment business is cash flow. It is important for all businesses but few have the challenges of making their money by providing staff, paying that staff themselves and then waiting for their clients to pay them. Weekly staff will expect prompt payment and it is the responsibility of the recruitment agency to pay. Clients inevitably will want to pay against an invoice and will expect traditional credit terms of perhaps thirty days. It can all add up to several weeks waiting to be paid. That does not even take into account the issues of whether clients will pay on time or the possibility of bad debt.

Investigate
While cash flow is something that a recruitment business will take into account when it prepares its annual budget, forecast and cash flow for the coming year it is nevertheless less than ideal. Indeed, every calculation is also reliant on the scenario of clients actually paying on time.  It is certainly worth investigating whether there is a better way to operate.

Factoring to develop
At www.cashsimply.co.uk  you can read about recruitment factoring whereby your invoice revenue becomes available immediately that invoice is raised with the responsibility for credit control handed over to the factor. There is a cost and it needs to be balanced against the benefits received. As long as you are generating turnover, and hence finance, you can concentrate on development rather than get too involved in administration and juggling.

If you add to this the fact that in recent times there have been business failures and resulting bad debt, the safeguarding of your invoice revenue by getting insurance against bad debt makes economic sense. Even with recovery on the way there are inevitably businesses that remain fragile.

Release your time
It may not be something you have really thought about before, but it’s worth stopping and thinking. How much time do you spend on non productive activities and are you taking all the precautions that you might? If you are busy chasing payments, you are not working on expanding the business. There has to be a value that you put on your time. The standard office hours of your business and those of clients and potential clients are likely to be similar. You are unlikely to be able to do too much outside those hours because there is not going to be anyone to talk to.

The economy is showing signs of growth after years of relative stagnation. There is an opportunity that needs to be grasped and your time has never been more valuable. If you make the decision to factor your invoices, you will have the money for growth and development. It is then up to you to use your energies to achieve that growth secure in the knowledge that you have done all you can to support your efforts.