Today’s economy is offering more and more opportunities to staffing agencies. Companies are outsourcing entire departments while many individuals are looking for roles that are more flexible than working for a major corporation. This creates a perfect environment to grow your staffing company. What holds many staffing agencies back is their slow paying accounts receivable. A staffing agency must maintain a positive cash flow to meet a growing payroll and operational expenses.
Invoice Factoring
Invoice factoring is a great solution utilized in various industries, including staffing companies, to convert open invoices into cash. Many staffing companies routinely factor their invoice to smooth out their unpredictable cash flow. Growing your staffing agency will require additional cash. By selling your accounts receivable to a factoring company, you get the cash you need immediately.
Factoring is Fast
Factoring companies move quickly to qualify your staffing company for funding. Their focus will be on the credit strength of your customers, not on your personal credit score. After the factoring company has on-boarded the staffing company the staffing company choses which accounts receivable to sell the factoring company. The factoring company will typically advance 85%-90% of the invoice amount immediately, giving the staffing agency the money it needs for payroll and taxes. Once the invoice is paid by the customer the factoring company forwards the remaining balance to the staffing agency minus a small factoring discount.
Grow with Factoring
Accounts receivable are difficult to predict when they will be paid. Payroll, taxes, and operating expenses must all be paid – and on time! Invoice factoring helps all types of staffing companies by providing a flexible financial solution. As your staffing company grows you can sell more invoices to your factoring company, without making any future obligations. Many staffing companies use factoring to help pay for seasonal sales and to expand into new territories. By taking advantage of invoice factoring staffing agencies have the confidence to take on larger contracts while paying their employees competitive wages.
American Receivable
For 43 years American Receivable has helped staffing agencies grow and become self-funded. Our streamlined application reduces the time required to get your staffing agency approved and funded. Call today, our 5 Star team is waiting to answer your questions.
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