invoice factoring for staffing companies

Invoice factoring is a simple and easy way to pay your staffing employees and contractors on a regular basis. Payroll factoring companiesįactoring companies can approve your factoring application quickly, often within one to two weeks. Employees may quit and the agency has to find a replacement, causing payment to be delayed or cancelled. Clients may not be happy with the employee and demand reduced payment or offsets. Many factoring companies don’t provide factoring services for permanent placements due to the contingencies and potential problems with payment. Recruiting agencies usually specialize in certain areas such as accounting, technical, or executive job placements. Businesses outsource recruiting to placement agencies in order to save time and take advantage of an agency’s expertise in a particular industry. Permanent placement firms or recruiting agencies match job seekers with clients needing permanent employees. Some employees continue working in a temporary role to meet their lifestyle desires or makeup for disabilities and hardships. Temporary staffing employees enjoy the variety of work assignments, as well as the opportunities for long-term employment (temp-to-hire). Common contract staffing positions are in the areas of accounting and finance, information technology, telecommunications or engineering. Contract staffing employees are typically highly skilled and professional. Staffing agencies usually specialize in certain industries such as administrative office work, warehouse and factory jobs, housekeeping personnel or catering services.Ĭontract staffing is a type of temporary staffing that is done on an individual basis, according to contractual requirements between the staffing firm and the client. Temporary staffing agencies hire their own employees and assign them to their clients to fill vacancies or shortages due to maternity leave, worker shortages, seasonal spikes, or special projects. Factoring fees are taken from the final payment. The factoring company sends you the final payment depending on the advance rate. Once the invoice becomes due, your customer pays the factoring company directly. Your factoring company verifies the invoices are correct, then sends you a cash advance for 85 to 95% of the invoice amount.įactoring companies usually provide funding within 24 to 48 hours of receiving and verifying your invoices. You generate invoices from your employees’ time sheets, then send the invoices to your factoring company.

Get immediately funded by your factoring company.

Bill your customer for the staffing services performed.

Perform staffing services for your customer.Payroll factoring, also referred to as payroll funding, is the cyclical process of the following: Payroll funding pays you up-front for your invoices, so you don’t have to wait for invoice payments.

Staffing agencies have inherent cash flow issues because customer invoices don’t get collected until 15, 30 or 45+ days, yet they have to pay their employees on a weekly or bi-weekly basis. Factoring companies provide staffing factoring or payroll factoring to staffing agencies so they can bridge the pay gap caused by employee payroll and customer invoicing.

Invoice factoring for staffing companies