The following article
describes how accounts receivable funding can provide the working
capital needed to fund the operations of a staffing company. This
article assumes that your company is providing temporary staff for
which you have payroll responsibility during the time they are working
for your clients. Coming up with the money to meet payroll and make
payroll tax payments can be a major challenge for many companies.�
This page will present our approach to solving these problems.�
If� you have
questions not covered on this or other pages of our site,� please
complete our contact
us form or give us a call at 1-800-598-1178.
Title: How To Fund A Staffing Company
Staffing
companies provide a key element to their clients, people.� These
people
literally are your company.� Without them your company is out of
business.� Therefore, making sure they are paid when you have
committed
to pay them is essential.� However, coming up with the cash to
meet
your payroll can be a challenge for both new staffing companies just
starting out, or for established staffing companies that have the
opportunity to place new staff with new clients. The challenge is
created by the fact that your clients do
not pay you as quickly as your� people need to be paid.�� Without the necessary working�
capital, your company may struggle to meet current payroll, or have its
growth choked off� because there is no way to pay the new
employees that would be hired to support the new client.
The following are some of the types of staffing companies that can
benefit from accounts receivable funding.
- information technology
staffing
- engineering staffing
- construction trades
staffing
- light industrial and
assembly staffing
- technical staffing
- medical technician
staffing
- dental technician
staffing
- nurse staffing
- clerical staffing
- legal staffing
- security guard staffing
- event staffing
- accounting and finance
staffing
- marketing staffing
The main tool we use to fund your
staffing company is accounts receivable funding (a.k.a. factoring).
Accounts receivable funding
provides advance payment on invoices for services that have been
provided by your people to your business or
government clients. The advance payments are made to your company
within 1 or 2 days
after an invoice has been presented and verified as being due and
payable.� The advance rate for most staffing company invoices is
typically about 80% of the invoice value, but can be higher or lower
depending on the situation. One
of the advantages that accounts
receivable funding has over a bank loan is that accounts receivable
funding makes working capital available to your company
for funding staffing operations without creating debt on your balance
sheet.� Put another way accounts receivable funding is not a loan.
Therefore, no debt is created. This can be a major advantage to your
company if the company is
under evaluation for sale, loans, or outside investment.
Here is a typical scenario.� You have staff working at your
client's location.� At the end of each week your people complete a
time sheet for the hours they have worked, and they have this time
sheet signed by their supervising manager for the client company.�
The manager's signature validates the hours� worked by your
employee.� Your employees then send the approved time sheets to
your office.� Your office compiles all the time sheets for your
employees at that company.� An invoice� is prepared and is
submitted to the client company together with copies of the time
sheets.� At the same time you also submit this invoice and time
sheets to our accounts receivable funding underwriter.� They will
prepare an advance payment to your company based on the invoiced
amount.� This advance will be electronically transferred to your
company.� In many cases the funds will be available to make
payroll the next week on work that was completed the previous
week.� With this funding in place you do not have to be concerned
that your company will not have funds available to make payroll each
week.� Instead you can focus your efforts on developing new
clients for your staffing company and know that working capital to meet
expenses for this new found business will not be an issue.
In addition to providing funding services that allow your company to
meet payroll, the accounts receivable funding underwriter also provides
credit checking services regarding new and existing clients.� It
makes no sense to do work for clients who will not pay for those
services.� The credit checking services alert you to a potential
problem before it becomes a real problem.��
Some of our underwriters also provide payroll services as part of the
funding services for staffing companies.� What this means is that
they handle all the payroll related services such as issuing paychecks,
making employer and employee tax deposits to government entities, and
issuing W-2's at the end of each year for all the staff working at your
client's locations.� Your company does not have use these payroll
services if it already has such a service in place.
Basic questions about how
accounts receivable funding works are answered on the page FAQ's
About A/R Funding. If you have additional
questions, or if you would like to learn more about how we can help
obtain funding for your staffing company, please
click here to contact us, or
Call us now at 1-800-598-1178
to get started.
|