4 Ways A Staffing Agency Can Control Its Accounts Receivable
Staffing agencies are companies that literally hold the livelihood of the people they serve in their hands. In order for marketing to run smoothly, business expansion, and above all, payroll to be met, a staffing agency must have a firm grip on its accounts receivable (AR).
Without this financial aspect of business under control, the agency could fall behind and eventually be forced to close its doors. No staffing agency wants to shut out employment opportunities to anyone; and although it may seem daunting to stay on top of unpaid invoices, this is a responsibility that staffing managers must take seriously.
If you are a manager of a staffing agency and notice that unpaid invoices are piling up, here are four things you can do to ensure that your employees never have a late paycheck.
1. Do Your Research on New Clients
Before you jump into a relationship with a new client, don’t be afraid to do some digging for any red flags that they’ll be an unreliable partner. Some of the areas to look into might be:
- Your potential client’s specific payment terms
- How they cnrrently pay employees
- Their track record of employee treatment/retainment
2. Build a Relationship with a National Factoring Company
While standard research can be useful for starting to manage your AR and future clients, an established relationship with an invoice factoring company can take your efforts to an entirely different level. Factoring companies work closely with their clients to help them find the right invoices to sell and which customers to do business with.
At no cost to your firm, we can perform a credit check on your potential clients and present you with the financial facts that let you determine their reliability as a paying customer. We help you focus on handling current unpaid invoices, while also using the information we provide as a way to ensure your business only accepts trustworthy clients in the new year.
3. Don’t Use Generic Invoices for Each Client
Before you start sending out invoices to clients, make sure you are meeting their company standards of invoice formatting. From items like purchase order numbers to service titles on the invoice, the details you include for each client can impact your future AR.
Take the time to do the extra work and find out what your client needs in order to process the invoice for prompt payment. The risk you take with a generic invoice is that important information can go ignored, and a client may be unable to process the payment at all. This leaves your agency sitting on an invoice that could go unpaid for months and end up costing you.
4. Triple Check Your Credit Policy
Every staffing agency should have an established credit policy that helps them stay in financial control. An air-tight credit policy prevents unreasonable clients from abusing your services. Your credit policy directly influences how your AR is controlled, so it’s vital that you review how your company handles the following practices:
- General invoicing guidelines
- Hard deadlines for invoice payment
- Acceptable forms of payment
- How you evaluate your client’s available credit limits
How Can Invoice Factoring Make a Financial Difference?
Unpaid invoices and poor AR practices can literally destroy a staffing agency. Waiting 30-90 days can quickly create a situation for a business that can hamper the functionality and growth of a company.
Invoice factoring serves as an affordable means for staffing agencies that desperately need to get paid in order to keep business running normally. Once you’ve established a relationship with a factoring company, you decide which invoices or accounts you want to factor and the factor does the rest.
At Goodman Capital Finance, we can guarantee advances up to 90 percent of each invoice. We don’t place limits on the number of invoices your agency submits, and that’s why so many staffing agencies across the nation rely on us for successful alternative financing that helps them meet their business goals.
Take Control of Your Staffing Agency’s AR with Goodman Capital Finance
Don’t let your unpaid invoices pile up beyond the 30 day grace period. Partner up with Goodman Capital Finance and start the invoice factoring process now.
We offer a 24-hour approval process and have the financial experts on-hand to help your agency make the right decisions regarding the invoices chosen for factoring.
Contact us today to learn more about our services or apply online to get a head start on the factoring process.