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Why Staffing Factoring Works Best for Recruitment Agencies

The recruitment and staffing business is one of the most vibrant industries in the world. In the United States, the staffing industry accounted for $117 billion in sales in 2012, according to the American Staffing Association.  In Canada, the industry is worth more than $7 billion.

 

The industry performs even better when the economy picks up as companies expanding need more manpower for their operations. But it does not mean that staffing companies are immune to financial problems. Since the clients of recruitment companies typically pay within 30 to 90 days, staffing firms are prone to cash flow challenges. Likewise, there are seasons when sales are low. Staffing factoring is a practical solution for recruitment firms that experience cash flow challenges.

 

Staffing companies are engaged in various employment-related services. These include providing recruitment and permanent placement of workers, outsourcing and outplacement, as well as training and human resources consulting.

 

Financial Issues

 

These companies often face unique issues when it comes to finances.  One is the cash flow problem. Staffing firms directly pay the workers they have hired, usually on a weekly or biweekly basis. In turn, these companies bill their customers after a month. Most customers pay after 30 days but slow paying clients do so after 90 days. Thus, recruitment firms face liquidity problems as they need to pay for their workers. Of course, these firms also have to deal with other expenses like rent and payment for utilities.

 

Recruitment agencies also experience cyclical sales patterns. Companies traditionally don’t hire workers during the last quarter of the year, for instance. Most staffing firms avoid getting a banking loan as it takes time to process and only adds up to the company’s debt. Simply put, cash flow problems can slow down a recruitment agency’s growth.

 

Invoice Factoring

 

Staffing factoring is considered a more practical financial solution for cash-strapped recruitment agencies.  Also called invoice factoring, this financial solution requires a recruitment agency to turn in their invoices in exchange for cash. Unlike bank loans, factoring takes only a few days to process. It also comes in flexible terms and rates.

 

Companies that apply for factoring can get cash in as fast as 24 hours, especially if they have established a favorable relationship with the factoring agency. Recruitment firms applying for the first time may have to wait for 4-7 days to have the money deposited into their accounts. Factoring agencies look at certain considerations like creditworthiness of the recruitment agency and value of the accounts receivable in approving an application.

 

Benefits
Apart from providing cash for day-to-day operations, invoice factoring provides numerous benefits to recruitment agencies. The money can be used by the recruitment agency for expansion, like hiring another sales executive who can bring in more clients. It can also be used for advertising to reach out to more job candidates. Staffing factoring also does not require the recruitment company to put up collateral. Finally, the money received from invoice factoring is typically higher than what a company would be able to borrow from a bank.

 

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We offer Canada Medical Factoring | Canada Medical Factoring Is Essential |

Canada Medical Factoring, canadian medical factoring
Canadian clients can get receivable financing with very little paperwork too. The choices are not dependent on financials, equity to debt ratio, or tax returns with a great company either.

Canadian companies understand that financing business growth can be a real challenge. Newly growing or already built businesses that sell on credit terms gradually need additional working capital because of the increase in the number of sales they have. Your sales of credit items to commercial businesses could have made a huge shortage of cash flow in the business you have, and your business will get a lot of perks out of using an accounts receivable financing service. CEOs should understand that there’s not an obligation to borrow cash from a financial institution so that they can give credit terms to clients.

 

Choose a good factoring group that provides receivable financial services for small businesses in Canada. Financial services should be open for staffing companies, service providers, distributors, manufacturers, transportation and trucking companies, and more.

 

Explain Accounts Receivable Financing

 

Accounts receivable financing is a practice that is used by companies to convert the sales that are based on credit terms so that they can get direct cash flow. Doing the financing accounts receivable is the ideal financial method to get enough working capital businesses based in Canada, of every size. The credit line that is receivable is based on the customer’s financial strength, who is the buyer, and not by the client, who is the receivables seller.
Canadian Receivable Financing Can Be Ready In A Matter Of Days

 

Canadian clients can get receivable financing with very little paperwork too. The choices are not dependent on financials, equity to debt ratio, or tax returns with a great company either. The decision should be based on the process of invoicing and the account’s credit strength. Pick a company that specializes in financing and evaluating accounts receivable and can come to a quick decision in a matter of days. The financial solution here won’t have much underwriting. The process for approval should be straightforward and simple, and it should entail under one week’s worth of work. That’s it, and you’re done. Clients in Canada should be able to have the perks of quick service and be able to begin using their money within several weeks of completing the application.

 

Canadian Businesses’ Necessities For Receivable Financing

 

Financing programs should be able to help businesses with fluctuating, or perhaps up and down, patterns of sales, or even new businesses who don’t have a financial base to depend upon. Any company at all can get receivable financing if it makes transactions based on credit terms that are open to customers who have proven financial strength.

 

What Kind Of Industries Can Get Receivable Factoring In Canada?

 

Every industry should be evaluated in a separate way because no single industry is the exact same as far as the invoicing methods go. Not every single one of the factoring businesses in Canada is going to accept every single industry. As a basic guideline, your business has to sell to a great credit-worthy customer, and must have an invoice that will be certified by the debtor of the account

 

What Is Canadian Medical Factoring All About?

 

Medical factoring can be done with entrepreneurs who operate a service-oriented business within the healthcare industry. Certainly, medical staffing agencies, medical supply companies, and medical supply companies can all benefit from factoring their invoices.

 

Medical factoring can extremely useful for vendors who want to maintain a positive cash flow when their customers might take weeks or months to pay them for the services they provide.

Need Medical Factoring  in Canada? Click Here

Understanding the Basics of Medical Services Factoring

In the health care industry, there are often two different departments that require the aid of medical services factoring. First there are the medical providers like clinics, hospitals, and private medical offices. Second are the vendors that provide services and supplies to the medical providers such as medical staffing agencies and those that provide medical transcription services. Each affect the other but when cash flow is slow they both suddenly come to a halt. So what is the solution?

 

Medical Services Factoring Creates Steady Cash Flow

The never ending complication is that medical providers like hospitals often have to wait for months before getting paid. This is because the transaction can go through several billing departments especially now since most patients pay using their personal medical insurances. Securing the payment from the medical insurance will take weeks due to verification and legal procedures. This is then going to go all through the hospital’s billing department a second time before it gets distributed to the proper departments that were intended to get paid in the first place. This last part also includes the vendors.

 

Because the process takes so long, medical service providers and vendors often have to slow down work or cut down on their staff to compensate. The only other option is to get a loan from the bank yet this can take just as long as receiving their fulfilled invoice. So what option is left but invoice factoring from medical services factoring companies.

 

How It Works

This is a very simple process. The medical billing department will take their invoices from insurance companies, financial firms, and others that will pay them in the weeks to come and sell them to a medical services factoring firm.

The firm will then process these invoices so that the medical provider can get all their payment in just days (mostly 24-72hrs) instead of waiting weeks. They will only get around 85-95% of the full invoice however as the factoring firm will keep the remaining balance until they paid in full. As soon as your customer pays the total amount you are given the remaining 10% minus the factoring fees, typically 2-3% . Now it will be the factoring firm to process those invoices and get paid in the weeks to come, making it much faster for vendors and medical providers.

 

This type of instant cash is better than loans because they are processed much faster and they often do not require good credit standing. Some factoring companies will check how the credit standing is for a medical provider or for their clients but over all this will not affect the pay out in many ways.

 

Another benefit is that you can get invoice insurance. This is very important for medical service providers since they should not be chasing after clients who did not pay their balances.

Without insurance the medical provider will need to pay the money back to the medical services factoring firm as penalty and chase the client to get their money. With insurance, the risk now transferred to the factoring firm. With the risks now taken out of the hands of the medical service provider and with cash flow always constant instead of having to wait for it to return, medical services factoring is often viewed as their financial savior.

To explore our Medical factoring option visit our website.

 

 

Why Should I Use Factoring?

By: ChrisLanchech

There are a number of benefits that you can obtain by factoring your invoices. I’ve talked about one of them already.

It’s cash flow. It doesn’t matter how successful your business has been, if cash stops coming in, then a time will come when you don’t have any.

Think of it like this. If you have a basin filled with water and you pull the plug, you have to pour in the same amount as is flowing out of the bottom. Otherwise, there will come a time, perhaps sooner than you think, when there won’t be any left.

But instead of water, it could be cash.And it’s something that can take you by surprise, especially when everything else seems to be going as well as it should.

For example, you could be filling orders and shipping them to your customers. Your customers could be delighted with your prompt service.

Or, you’re employees could be the most productive they’ve ever been.

Or your suppliers could be giving you exactly what you need just-in-time.

 

But, if there’s a delay for any reason in the payment of your invoices, you could suddenly find that there’s no cash left in the company to do any of that.

 

How would you feel if that happened to you?

 

Factoring can do more than just keep your firm going. It can also help you to maintain your creditworthiness.

The news today is replete with examples of people who have been thrust from the homes they’ve lived in for 30 years, because when they started missing mortgage payments, the banks foreclosed on them.

 

What does that teach us about how much the banks trust the firms we own to help us when we need it? If nothing else, it demonstrates that when the chips are down, they won’t.

 

Whatever they were willing to do for us in the past, matters not a jot.

 

And so that means that we have to look for other options and have them in place before we need them. Because, as much as we dislike them, banks are still the place where we have to go, in most case, to get loans for capital expenses.

We can’t live with banks, and yet we can’t live without them. If your creditworthiness has been damaged, for any reason that you care to name, your bank simply will not loan you the money that you need when you need it.

If truth be told, they may not anyway. But, your chances are greatly diminished if your credit rating is poor.

And so, rather than waiting until the last little bit of cash is about to drip out of your company, my suggestion is that you make factoring a part of your firm’s strategy.

In today’s economy, you simply don’t know when you might need some extra money, just to tie you over. And you can’t afford to leave something as important as the survival of your business until the last minute.

 

The Necessity of Cash Flow

Banks are notorious for offering you money when you don’t need it, but demanding it back when you do.

If you add to that the growing propensity of customers to pay on the last day of the grace period . . . or later, then you’ll know that even the healthiest businesses can find themselves in dire straits before they know it.

 How did we get into this mess?
To a certain extent, it doesn’t matter.

But for the record, we can still remember when the banks were bailed out. Some thought they were too big to fail. (Pride goes before a fall.)

Others preached ethics, but went for big profits instead.And still others decided that the laws applied to everyone else, though not to them.

But probably the most frustrating thing to come out of the financial debacle is the fact that when the government handed over the billions of dollars required to keep them from going bankrupt, they made no attempt to hold these same companies accountable for the way they spent that money.

And so instead of providing financial support to businesses, they simply paid themselves the bonuses that they couldn’t have afforded beforehand.Whatever the causes were, it’s businesses like yours that have been left to suffer.

I remember someone telling me that he was property rich, but cash poor. And I imagine that you could be in the same situation. You have the plant and equipment, you have people with the skills you need, and you even have a relatively full order book. But, your cash flow could do with some help.

There’s just too much time between when you send out your invoices and when you get paid for them. Cash flow is an indispensable part of any successful business. And shutting it off in a firm can have the same effect as staunching the flow of blood in the body. Neither can survive for very long.

Factoring is one means that you have available to fight back. And I use the term “fight” for a reason. Business is something of a war.

Some will argue certainly it always has been and always will be. But I don’t think that’s the case at all. There is still a lot of collaboration and cooperation going on to this day, and social media may help to make it even more so.

But there is something of a fight involved, especially when it comes to getting the money you need to keep yourself going. The war, however, seems to be against the whims of your bank and economic pressures, rather than that of your customers.

In case you’re unfamiliar with the term, factoring is nothing more than a means through which you can obtain cash quickly via your invoices. It’s not a loan. It’s a sale.

You sell your invoices at a bit of a discount to another company. That company pays you cash for them, and then you’re able to put that money directly into your business.

And by doing so, you can keep your cash flow going.

Should You Choose Factoring Companies Over Banks?

By: Chris Lanchech

Factoring companies purchase accounts receivable from various businesses and will enable you to get immediate cash on-end to serve as resource for your day to day operations. Of course each time they lend you an amount it will depend mostly on the quality of your assets. However there have been accounts of people getting duped by fraudulent factoring companies and there have been factoring institutions cheated by fraudulent borrowers as well. With banks offering business loans and other credit options, why would factoring invoices be a better option?


Reason #1: Bigger Cash Out
The problem with getting financial assistance from a bank is that they normally give you only up to 60% upon payout. Some banks and credit institutions do purchase invoices and assets but they won’t pay you enough to get your cash flow back on track. With a factoring company, however, you can get as much as 75-80% right on day one. That is pretty much the same as saying you got paid for the job right on the same day you started working on it. It becomes even better if you factor multiple invoices at the same time.

Reason #2: Lower Costs
Credit unions and banks can charge a pretty hefty fee. You’ll see charges that can go all the way up from 4% to a whopping 12%. They can literally rob you of your profits. A factoring company will generally charge you less than 2%. This means you get to use your money and they still get to earn a little profit along the way. One of the best things about factoring invoices with dedicated companies is that they sometimes offer factor insurance. This means you won’t have to pay them the money in case your client defaults on his payment. Instead, they’ll give you the rest of the loan and will then chase after your client to get the money back.

Reason #3: Faster Processing
Your business may not be able to function until you get some funds to start with and the problem with banks is that the application and assessment procedures could last for weeks. The good thing about a factoring company is that the entire procedure only takes a few days. Usually it only takes three to five days and you’ll have the amount deposited to you. To make the process even faster, factoring invoices usually only requires you to fill out two pages of information. This is quite the opposite of applying for a business loan or factoring invoices with a credit union because that would require piles of paperwork and information.

The Verdict: Factoring Companies versus Banks and Credit Unions
Banks and credit unions can be an option especially if your business has good standing with them but remember what your company’s main focus is: profit. Profit is derived from steady cash flow and lower overhead costs. You can only attain these by having stable resources, less costs, and less time wasted. With all of these taken into consideration, your company can benefit more if you choose factoring companies instead of banks.

Temp Staffing companies Can Help Small Businesses Develop

August 15, 2012

Think of this, the national employment rate in June was 8.2%. That means that there are a lot of GOOD people out of work. If your business is seeking a qualified individual but do not want to higher for the long-term I highly recommend looking into a temp Staffing company.

Temp Staffing companies Can Help Small Businesses Develop
Another benefit using a temp Staffing company to find short-term employees is you are able to expand your reach to highly experienced workers qualified in special areas. According to The Wall Street Journal after surveying 811 business owners found that 31% reported “they had unfilled job openings in July because they couldn’t identify applicants with the right skills or experience.”

Additionally, 41% of 154 small manufacturing firms surveyed reported they were un-able to find skilled and experienced workers.

Why?

Most business owners get applications from their websites, and walk-ins. Sure they get tons of applications, but a lot of the applicants have similar skills. By leveraging the databases Temp Staffing companies have you can narrow down your search. Business owners told The Wall Street Journal “We could grow a lot faster if we could find the right people.”

In the past it would make sense to train employees. However with the high turns in technology there may be a steep learning curve. Or maybe you’re looking for an applicant with a skill you don’t possess like PHP coding.

We recommend looking to Temp Staffing companies for new talent. We also recommend looking to Neebo capital to help you with your cash flow so you can put on new workers in the most efficient way possible. Maybe you have cash flow tied up in your accounts receivable or you have tried working with Temp Staffing companies in the past but they pay too slow. Either way give us a call and we will gladly help.

Good Luck
Chris