Staffing agencies operate in a very fast-paced industry. They source individuals to fill roles at all types of companies, ranging from general labor to highly technical fields. In order to sustain operations and grow successfully, staffing agencies need to not only cover their own expenses, but also pay those individuals working in various roles for their clients. With clients paying invoices at varying rates, there are times when cash flow can become turbulent and place a strain on finances that makes it hard to keep things running smoothly.
Striking a Balance Between Services and Revenue
Many staffing agencies have agreements with their clients to provide qualified employees for weeks, months, years, or even for a custom duration to complete a specific project. The sourced employees are paid by the staffing agency on a weekly or bi-weekly basis. On the other side, clients are issued invoices with payment schedules of 30 days or longer. This means staffing agencies are spending more to pay their employees and cover overhead costs than they are receiving at any given movement. The imbalance in the cash flow can place a strain on finances, sometimes preventing staffing agencies from making payroll, or even taking on bigger client contracts. Running a successful staffing agency means having access to a reliable and renewable source of working capital.
Improving Cash Flow
To ensure ample working capital to make payroll, cover overhead, and court larger clients, staffing agencies use accounts receivable factoring services. Instead of waiting on clients to remit payment on invoices, factoring converts those receivables to cash within 24 hours. Factoring helps to balance cash flow and smooth our revenue cycles so there are no financial strains. Sourcing highly qualified individuals for larger client contracts becomes much easier, because the capital is on hand to cover the rate of pay. Staffing agencies can also explore new markets and opportunities to expand their reach.
New Century Financial provides accounts receivable factoring services for staffing agencies throughout the United States. Our services can be tailored to fit your needs, with no hidden fees or contracts. Contact our offices today to learn more about why staffing agencies choose New Century Financial.