Under the strain of COVID-19, staffing agencies have stood firm and adjusted to a new economy and work environment. Many agencies have embraced their staff and clients’ remote work needs and have focused on delivering solutions that address these new challenges.
However, this progress is often hampered by inefficiencies in client invoicing and outdated systems – which add needless costs and can strain client relationships. In this new reality, it’s important to be as efficient as possible. With that being said, here are four ways that your staffing agency can optimise your client invoicing to take advantage of current trends.
Be flexible and find a payment plans that works
One thing to keep in mind when it comes to invoices is to be flexible to each client’s specific needs. Each client will have their own needs as well challenges to overcome. If you’re having problems with clients paying on time, one thing you can do is ask for a down payment. If you have a good relationship, they will likely be open to negotiating this for future services.
Of course, given the strain some businesses are currently under, some clients won’t be able to pay on time no matter what you do. For these clients, it may be beneficial to ask if they want to go on a payment plan. Let them know that you’re aware of their specific circumstances, and offer to help them with payments going forward. After adding a small percentage to their overdue fee, work with the customer to find out a payment plan that works for them.
In some cases, more drastic measures may need to be taken. In order to help make losses from the current pandemic more manageable, you can use invoice factoring. Invoice factoring, or selling money owed to you by clients for money upfront, is a good way to get funds in a pinch to help pay your own bills. While you take a small loss in the long run, it will help with cash flow during difficult periods.
Taking advantage of technology
As the world becomes increasingly digital, it is important for you to take advantage of what current technology has to offer. Cloud-based software is vital for any modern business. This software makes it easier for clients to sign in and pay on time. In fact, it usually means that payments are in on time more often – usually up to three times faster.
Automation makes everything in the entire process much quicker and more efficient. Using some sort of invoice automation software, you can customise the frequency of the invoices and see all information related to the invoice at the click of a button. These things include the number of clients who received their emails, any bounced emails, who has or hasn’t paid, and all other relevant financial information.
Additionally, you can also take advantage of automation here and send clients reminder emails however often you’d like. This way, your clients are always on top of your payments and are much more likely to pay on time.
Connecting time & attendance systems to payroll
If you’re not connecting your time and attendance system to your payroll system, then you’re leaving a great deal of efficiency savings on the table. There is simply no reason for any staffing agency to still be downloading timesheet spreadsheets and then either uploading these into payroll, or worse still, manually keying in each employee’s hours.
What’s more, in most instances you shouldn’t need to give up using your existing payroll software that you’re already used to. Plenty of time and attendance platforms provide payroll integrations, which are either out-of-the-box integrations which come ready-to-use, or you can request a custom integration if there isn’t a ready-to-use option for your chosen payroll system.
Once you’ve connected these two systems you should be able to start automating payroll at the click of a button. Not only does this remove hours upon hours of manual work each month, it also all but eliminates human errors when processing payroll, as well as providing far more robust fraud prevention for your business.
Adding markups and billing rates
Lastly, adding markups and billing rates to your invoice calculations is also often an area that can benefit from some targeted optimisations. As any staffing agency will attest to, calculating bill rates and burden rates is no small task, and that getting these right can be the difference between profit and loss.
So having done the hard work number crunching your margins, make sure you’re then applying these to your client invoices the smartest way possible. What you don’t want to be doing is flipping between spreadsheets and billing software, manually entering margins for each client or employee.
First off, make sure you have a master spreadsheet containing all your markups and billing rates per client and employee. Google Sheets is often a better option than Excel, as it enables real time collaboration, you can easily view the edit history and set permissions for which employees can access and edit the document.
Once your margins are all in one place, if you’re not already doing so, consider investing in specialist staffing agency software. which enables you to program markups and billing rates per client. Once these are programmed in, you can then automatically add margins for each client. Then it just becomes a case of updating the numbers in the system as and when you update your billing rates.
To conclude, all staffing agencies should take some time every now and again to look into their current invoicing processes and systems, to see if some simple measures can improve efficiencies and decrease errors. And as with all backend process optimisations, it pays to do this sooner rather than later.
