Invoice Factoring B2B For Staffing Agencies
Running a staffing agency comes with many financial hurdles, especially if you need to wait 30-90 days for customers to pay invoices. This lengthy waiting period can create a tight cash flow situation, making it difficult to cover operating expenses and ensure your business remains profitable.
There are several ways to resolve this issue, but one of the most useful and frequently overlooked options is the company’s accounts receivable assets. Companies may sell their accounts receivable for a discount and receive immediate access to cash to help cover expenses such as payroll, business expansion, and other daily operating expenses.
This method also avoids the stress involved when traditional institutions are not an option. They may take a long time with the approval process—time that your staffing agency may not have.
Rather than waiting for money to come in, consider using an accounts receivable invoice factoring service to access capital found in your customers’ invoices.
Start your Credit Application today or fill our our contact form and speak to a factoring specialist to learn more about how we help businesses grow.
What is Invoice Factoring B2B For Staffing Agencies?
Invoice factoring, also known as accounts receivable factoring, is an alternative form of funding that can be helpful to staffing agencies struggling with cash flow issues.
The factoring service agrees to purchase its clients’ outstanding receivables at face value, minus a discount that is often a percentage of the invoice.
This form of financing allows businesses to get the cash they need much faster than it would take for their customers to pay them, which can be anywhere from 30-90 days and sometimes as long as 120 days.
Once a business owner’s credit is approved and terms are agreed upon between the staffing agency and factoring company, the staffing agency sells their customers’ unpaid invoices to the factoring company.
The factoring company then confirms that the invoice is valid with the staffing agency’s customer (debtor) by obtaining proof and then advances the funds minus a reserve to the client.
Following these initial steps, the factoring company then works with the customer (debtor) to collect the face value of the invoice. Once the debtor pays the invoice, the factoring company returns the reserved money minus the discount to the client.
Accounts Receivable Invoice Factoring is a positive resource that helps staffing agencies grow, cover payroll, meet operating expenses, and cover regular cash flow needs.
Invoice factoring is the perfect solution for any B2B needing immediate cash.
How Does Invoice Factoring Help Finance Staffing Agencies?
It can be challenging to seek financial help as a business owner. In the world of staffing, where receiving payment from clients can take an extended period of time, a consistent stream of income is essential.
The primary benefit of invoice factoring for staffing agencies is the rapid access to cash that comes from it.
If you have a delay in funding caused by slow-paying customers, invoice factoring can speed up the process of getting paid, so you have the cash you need to manage your immediate expenses.
Invoice factoring is worthwhile if you cannot commit collateral to a bank for a loan.
Factoring companies often only care about the value of your invoices and the creditworthiness of your customers, so you won’t have to concern yourself with the risks associated with marking a valuable asset as collateral.
How Great Funds Factoring Helps Your Staffing Company?
How does Great Funds Factoring help staffing companies like yours quickly get the cash they need? Continue reading to learn more about our invoice factoring process.
1. Discovery
At Great Funds Factoring, we understand that there are many financial challenges that even the most successful businesses can go through and the stress that it can cause. We believe that good communication is key to developing a strong working relationship with our clients and will strive to be personally available to answer questions about receivable factoring.
During the discovery process, we aim to get a better understanding of your business needs, gain your trust, and determine if open account receivable factoring is a fit for you.
2. Underwriting
After you submit your credit application, Great Funds Factoring, LLC will review your credit application along with other documents required such as bank statements, master customer list, and financial statements.
3. Approval
When the due diligence is completed, Great Funds Factoring works on the approval process. Usually, the entire process both underwriting and approval review takes one or two business days. Once approved, we send you the proposal and all the documents need to set up your account.
4. Fast Cash
As you send invoices to your customers, we verify them and advance your funds immediately to your account, while holding a small amount in reserve until your customers pay.
Non-Recourse vs. Recourse Invoice Factoring
When seeking out invoice factoring services, two types are commonly available: recourse factoring and non-recourse factoring. Great Funds Factoring offers recourse factoring. With recourse factoring, we will work with the debtor to verify the invoice is accurate and viable via proof of delivery. We will then monitor outstanding A/R and work with them to collect payment.
However, if the debtor does not pay Great Funds Factoring and all efforts have been made to collect, the debt will go back to the client, who is responsible for reimbursing us.
In non-recourse factoring, the factoring company assumes all risks if the customer doesn’t pay. However, this option is more expensive and requires a greater, more in-depth credit review due to the increased risk.
Great Funds Factoring Helps Many Types of Staffing Agencies
No matter what kind of staffing agency you own, it can benefit from Great Funds Factoring’s assistance. Money tied up in accounts receivable is an excellent resource for capital. We’re here to help you gain access to that capital in a convenient time frame so you can manage daily expenses and continue growing your business.
If your staffing agency needs additional funds to cover payroll and operating expenses, Great Funds Factoring is the B2B partner for you.
Below are examples of the types of staffing agencies that can benefit from invoice factoring:
- Traditional Employment Agencies
- Temp Agencies
- Contingency Employment Agencies
- Executive or Retained Search Firms
Let us help move your business forward
Great Funds Factoring LLC
You need a regular and reliable cash flow for your staffing agency to operate without issue. If your staffing agency is being held back by invoices that take a while to get paid, then Great Funds Factoring is here to help.
Call Great Funds Factoring at 910-My-Money (910-696-6639) or use our online contact portal.
We encourage you to fill out the online credit application and unlock the power of your customers’ unpaid invoices now.
