Having a staffing factoring company gives the owner the ability to have continued access to capital at whatever rate of growth that is taking place. As a staffing business grows so does the payroll costs, this can cause some staffing company owners to slow growth so that no payrolls are ever missed. Temporary staffing is a capital-intensive business, with the bulk of that cost going to paying the temporary workers. Capital to grow as fast as a business can place.
The staffing company can always receive the funding for the previous weeks hours worked and make sure that the money is in the account or sent to the PEO or payroll provider so that the workers get paid on time. Access to the cash you need to make payroll each payroll periodĪs factoring gives a business owner the ability to gain access to cash the same day they create an invoice a staffing business no longer has to wonder if they will have the cash to make payroll.Meritus Capital does not require any particular credit score, time in business, or volume of business to qualify! Benefits of partnering with a factoring company for a Staffing business: Outside of this, the factoring company just wants to see that you have a plan to stay in business. Staffing companies make great factoring candidates as they typically have signed time cards along with the invoices which proves that the work has been done.
With a simple customer list, factoring companies can check with the credit bureaus to see if the customers’ credit is good and if they look likely to pay their bills. The customers have the ability to pay their bills. The two main things a factoring company wants to see when onboarding a new client is that the invoices are good and Qualifying for staffing factoring is really quite straight forward. Typical fees range from under 1% to 3% of the invoice value depending on a number of factors. This ranges from company to company based primarily on how long it takes your customer to pay.
Once the customer pays the invoice, the staffing company will receive the remainder of the value of the invoice less the small fee the payroll funding company will take for providing the service. This often allows the staffing company access to funds the same day invoices were submitted to the factoring company, enabling almost instant cash flow as needed. Then, the staffing factoring company will fund 85%-95% of the value of those invoices to the temp staffing agency. Typically a temp staffing agency will submit their invoices and timecards from the prior week to the staffing factoring company for funding. The factoring company verifies the work has been completed through timecards or other methods and then the factoring company advances funds based on the receivables. They do this by submitting invoices to the factoring company at the beginning of a payroll week for hours that their employees have worked. Staffing factoring specifically then, is how temporary staffing companies turn their outstanding invoices into cash by using invoice factoring companies.
This helps smooth cash flow regardless if payment terms from their customers are 10 days or 90 days. Thousands of staffing companies across the U.S and Canada utilize ‘staffing factoring’ to make sure they are able to pay their employees on time each payroll period.
0 kommentar(er)
