5 Reasons why recruitment finance is the way forward
How can recruitment finance make a difference to you and your recruitment business during these times and in the future?
In the current market ‘Cashflow’ is more important than ever. Whilst adapting to clients everchanging requirements and bolstering your job bookings makes for great reading, it means nothing unless money is paid into your account. So, how can recruitment finance make a difference to you and your recruitment business during these times and in the future?
1. Quicker decisions
You will be all too aware that it can take up to three months, or even longer, for a client to pay their invoices, but other bills will need to be paid in the meantime. And if you operate a temporary agency, your workers will expect to be paid each week. This can put extreme pressure on business owners to ensure there is enough cash in the bank to honour these commitments.
Compared with banks, alternative finance providers are accommodating to the ever-changing needs of recruitment businesses. This can be critical, especially if you work with clients who need to scale up and down operationally within short-time frames.
Fast access to cash means that you can make quick decisions and commit to your client’s requirements, without having to worry about applying for a business loan or working out whether you have enough money in the bank.
2. Faster access to your money
Cashflow can make you or break you. Having access to the funds that are needed in the ‘here and now’ is just as important as those that will be required to reinvest into the business and fuel its continued growth further down the line.
Alternative funders can provide you with upfront access to the finance you need when you need it. So, even if your clients take 60 days or more to pay, the money can be in your account within a day or two; thereby, guaranteeing a positive cash flow.
Some recruitment specific funders offer a ‘complete’ finance solution by providing 100% funding and full back-office support. Paying your workers direct, releasing your profit margin upfront, and invoicing your clients, each week. Saving you the time and hassle of managing the funds released to you and the admin that comes with it.
3. Effective credit control
Ask any business owner what one thing is most likely to make them feel uncomfortable and it will be speaking to their clients about money. You do a great job and invoice on delivery, yet your client seems to take an age to pay for the services you have provided. Yet if they don’t pay, this can add unnecessary strain on your finances as well as eating up credit and funding limits on clients making it impossible to grow.
There are recruitment finance providers who will provide comprehensive credit control support as part of their overall recruitment solution. This includes invoicing clients, chasing debt, and even assisting with legal enquiries, should a client not pay at all. Leaving you to focus your time on performing billable tasks and developing your recruitment business.
4. Mitigated risk and greater peace of mind
When it comes to talk of finance, the word ‘risk’ often comes into the conversation. By ensuring that you have the right financial and back-office support in place, you should have peace of mind to confidently take on contracts of any size. An alternative funder will provide you with debt protection as part of their finance solution. This means that should the inevitable happen and a client was to go bust, your invoices would be insured to the approved credit limit.
Most recruitment finance providers will include credit checks and due diligence, as well as the debt protection provided as part of their finance solution. Helping reduce your risk and protecting the future of your business.
5. More time to focus on growth
You don’t want to spend valuable time worrying about cash flow and juggling your admin – becoming a jack-of-all-trades. If there’s a chance that administration tasks will take you away from developing your business, then it’s worth considering an alternative finance provider that can provide you with back-office support.
Not only will they provide you with the financial support required but they will also take care of all your admin needs, from payrolling your temps and HMRC submissions, to invoicing your clients and chasing payments. Think of the amount of time that you would save and could use to focus on developing new business?
Let someone else take care of your back-office, leaving you to focus on the front-end. Spending your time on business development, sourcing the best quality talent, and fee-generating activities. Those businesses get to market more quickly, stay ahead of the competition, and most importantly – grow.
Choosing the right recruitment finance provider is key
The important thing is to make sure that you partner with a specialist financier that understands the recruitment market and can be flexible to support your business now and in the future.
Over the past 16 years, Simplicity has been supporting recruitment businesses all over the UK, by providing them with unrivalled funding, back-office support, and recruitment technology.
By removing the burden caused by financial constraints and time-consuming business management, our unrivalled range of services and support will help you deliver your growth aspirations.
Please feel free to contact us on 01594 888518 to find out more about our recruitment finance solution or download a copy of our brochure HERE.