As businesses reopen and the economy is poised for growth, companies are relying heavily on staffing agencies to fill roles. However, businesses and even government offices that use staffing agencies pay invoices according to staggered schedules, causing gaps in cash flow that prevent growth by consolidating staffing cash flow by relying on financing through accounts receivable factoring.
Cash Flow and Staffing Agencies
Cash flow is much more than just a stream of revenue for staffing agencies. A strong influx of revenue allows staffing agencies to pay their employees who are out in the field. It also allows agencies to cover overhead costs, source new talent, and take on larger client accounts made possible with newly acquired staffing cash flow.
If clients are paying their invoices every 30, 60, or 90 days, then the lag in revenue can stall growth plans. In severe cases, it can result in clients losing those valuable employees they were supposed to pay in the first place. In order for agencies to hit their stride and reach their growth financing potential, they must first maximize cash flow, and that starts with receivables. See our article helping staffing agencies take on new clients for additional ideas for growth, balancing services and increasing revenue.
Accelerating Revenue
Staggered payment schedules are baked into the contracts with clients. On top of that, invoices with payment schedules of a month or longer are a standard business practice – one that is not going to change anytime soon. So how can staffing agencies accelerate revenue to position themselves for growth? To get a stronger foothold, staffing agencies use accounts receivable factoring to accelerate revenue without taking on debt.
Accounts receivable factoring is perfect for growth financing as it is a transparent exchange of unpaid invoices for cash. Because receivables are assets that already exist, agencies can preserve their credit scores while avoiding debt. The transaction is fast and simple, allowing staffing agencies to boost cash flow and take care of existing unpaid invoices, as well as future receivables. The maximized cash flow gives agencies the ability to cover expenses, make payroll, and build up capital to roll out plans for growth.
Through accounts receivable factoring, it is possible to hire more talented staff and land larger accounts. Factoring will help staffing companies to balance their cash flow while smoothly handle their revenue cycle while avoiding financial strains.
Get Started Today
New Century Financial offers comprehensive accounts receivable factoring services with no upper limits and the ability to select which invoices or parts of invoices we factor. Our fast and transparent process ensures you will have access to funds within 24 hours, so you can stop playing the waiting game with staggered payment schedules. To learn more about factoring solutions for your staffing agency, contact the team at New Century Financial today or read how we can help your staffing agency grow potential with our “Entrepreneur’s Guide to Factoring”. Call us at 866-579-1483 or Apply Now to get started.