Staffing company owners face a unique challenge with balancing their revenue and expenses. Companies that specialize in placing permanent staffing can spend a long time recruiting and qualifying each job candidate. Yet they may not see any income on that investment of time and resources for weeks or months after the employee is placed. Yet people need to be paid and overhead expenses need to be met.
In today’s economy, recruitment and placement staffing companies play a critical role in our business world. Having the best possible employees in each department can make all the difference in a company’s bottom line, so working with a strong staffing company that will find and place the right employees can save both money and time.
This is where factoring comes in. A factoring company works with the staffing agency owner or accountants to bridge the gap between placing job candidates and receiving payment from customers. The factoring company purchases the staffing agency’s invoices, or accounts receivable, and pays them the majority of the amounts right away. Then when the customer pays the invoice in full, the staffing company receives the rest, minus a small factoring fee.
Factoring tip for Permanent Placement Staffing Companies
Partnering with a factoring company not only buys time, but it also can enable the owner to invest in resources that will help the company grow, such as advertising, hiring new recruiting staff, expanding office space, and developing relationships with potential new clients. Look for a factoring company with experience in the staffing industry.