The Recruitment Industry

What is invoice finance for recruitment?

If you run a recruitment agency or supply temps, you’ll be familiar with ‘negative cash flow’. Staff are paid weekly or monthly but when you’re regularly having to wait for clients to pay it, it can leave you vulnerable to a shortfall leaving your, business constantly hungry for cash. The more you grow your business, the greater the problem. But using invoice finance for recruitment is ideal when it comes to bridging the gap between expenditure and income, alleviating the pressure on your cash flow.

Whereas factoring provides you with the opportunity to outsource your ledger management so you can focus on your business. Invoice discounting provides you with the cash you need, whilst letting you retain management of your own credit control and debtor ledger.

As recruitment is a pressurised industry with an intense focus on cash flow, we will work with you to make the whole process as simple and quick as possible. With the success of your business largely dependent on clients paying on time, we can help you find a factoring company who is willing to manage your ledger and provide you with cash as and when you need it.

Invoice finance for recruitment can be complicated, dependent on your business’ needs, there are two types of factoring for this industry that you can choose from:

• Recruitment Factoring – Up to 90% of your invoice is funded and this is available for temporary and permanent placements. Back office support to manage your ledger is not provided with this option.
• Recruitment/Payroll Factoring – Up to 100% of your invoice will be funded (net of VAT) and wages are paid directly to staff with payslips issued. You receive your margin, your ledger is managed and automatic payments to HMRC (VAT, NI and Income Tax) are made.

How can invoice finance for recruitment benefit my business?

• Cash will usually be released from your invoices within 24 hours, so you can pay staff without delays alongside increasing your cash flow and removing the risk of funding the shortfall yourself, especially when payments are late.
• Management of your ledger can be outsourced to your factoring company. They can also pay staff and deal with tax payments directly, leaving you to focus on running and growing your business.
• However, if you would like to maintain control of your own debtor ledger, then invoice discounting would be the ideal solution for you. This allows you to preserve your customer service levels without affecting your chances of securing finance for your business.
• Traditional bank borrowing usually requires a personal guarantee for up to 100% of the overdraft often supported by a mortgage over your home. However, factoring companies take their security from the value of the ledger, often taking guarantees for a lesser amount and rarely requesting a charge over your home.
• The facility grows with your business so there will be no need to regularly negotiate, unlike with a bank overdraft.
• Many factoring companies offer optional bad debt protection by way of credit insurance. You can add this on to your funding facility providing you with peace of mind.
• For an additional cost, many factoring companies include bolt on services such as processing payments, matching timesheets to invoices and producing payroll slips.
• You can secure confidentiality by opting for invoice discounting which will provide you with the finance you need, against your invoices whilst leaving you in charge of your ledger management and any contact you have with your clients and staff.
• Regardless of how many clients or staff you have and what you want from your facility, there will be a factoring company out there to provide you with the credit you need.

Why choose us?

Our years of experience have taught us that not all businesses are straightforward but regardless we understand that a stable credit facility and cash when you need it are important to all businesses.

We will work with you to understand your business and its needs to put you in contact with a factoring company that will not only be the right fit for you but can offer you the best deal on the market.

To discuss your credit needs confidentially, contact us now to chat to one of our experienced and knowledgeable advisers.