Job vacancies in several sectors are hitting all-time highs and your staffing agency has the potential to grow quickly to meet market demand. But when customers are paying their invoices in 30, 45, 60 or more days, your ability to meet payroll, hire new staff and increase sales can be a challenge.

If you’re working in the staffing sector and are often waiting on customer payments to hire and pay staff (or meet other business growth objectives), invoice factoring might be the solution to your working capital needs.

In this guide on invoice factoring for staffing companies, you’ll learn:

Challenges facing staffing companies

Why staffing companies should use invoice factoring

What a staffing company can expect with invoice factoring

How a staffing company can qualify for invoice factoring

Invoice factoring: bringing peace of mind to staffing companies

Challenges facing staffing companies

For staffing companies helping place employees with businesses in healthcare, construction, accommodation and food, retail and manufacturing, there are many opportunities for growth.

Taking advantage of these staffing opportunities in the market requires capital and steady cash flow. For many, that can often mean funding major expenses (such as payroll) through traditional financing methods while waiting for clients to pay their invoices — whether that be companies or the government.

Without access to funds, staffing agencies often struggle to meet payroll and end up passing on business growth opportunities.

Overcoming high-interest loans with invoice factoring

A staffing agency in the healthcare sector came to Liquid Capital for invoice factoring. The company had been invoicing $30,000 a week but had to use personal credit cards to make payroll while waiting for invoices to be paid.

Over time, it became harder to make the minimum payments on the cards and the business was held back from taking on new contracts and growing.

Solution: Two months after they began invoice factoring with Liquid Capital, the staffing agency owner recorded a six-fold increase to his weekly invoice total. He was then able to hire and place more staff and accept more government contracts.

Why should staffing companies use invoice factoring?

Invoice factoring is a reliable way for staffing agencies to access working capital quickly. Liquid Capital purchases your invoices, providing funding and allowing business owners to outsource invoice management by collecting the money owed to you by your customers.

Unlike traditional financing options, the invoice factoring process doesn’t consider how long you’ve been in business or require the same types of documentation.

If you have credit-worthy customers, and customer accounts receivables to secure your funding, then invoice factoring could be the solution you’ve been looking for.

If you’re new to the process of invoicing and accounts receivable, Liquid Capital will also take the time to educate business owners on the best practices for structuring and collecting on an invoice.

What can a staffing company expect with invoice factoring?

Invoice factoring is incredibly easy for business owners to learn, understand
and implement in a staffing agency.

Here’s how invoice factoring works:

After approval, we will advance your business up to 85% of the value of your invoices.

We will collect payment from your customers and we’ll pay you the remainder of the balance (less applicable fees).

You’ll be able to view invoices in our real-time 24-hour online reporting system, where you’ll have full access to funding status.

The process can be customized to match your needs. For example, Liquid Capital can time our financing to match your payroll so you always have enough money to pay your staff.

Invoice factoring is a flexible solution for staffing agencies, as you are also able to decide how long you need to use invoice factoring services. Liquid Capital won’t lock you into a long-term contract. If you have months where you have adequate cash flow and don’t need to factor your invoices, you are able to opt-out of the process.

How can a staffing company qualify for invoice factoring?

For staffing agencies, the invoice factoring approval process starts by contacting your closest Liquid Capital office (no credit checks or registrations are required or executed at this point). This is followed by a more detailed application where Liquid Capital’s underwriters review your customers’ financial health, including credit reports, references and opportunity analysis.

If your business and accounts receivable clients are in good standing, we’ll approve you for factoring and perform ongoing credit monitoring.

Invoice factoring: bringing peace of mind to staffing companies

For staffing agencies, invoice factoring can take away short-term cash flow pressures and free up the time and overhead you would have spent monitoring and collecting accounts receivable to focus on new opportunities.

“All of my clients tell me, ‘I sleep better at night, knowing that I’m going to have the liquidity to operate and I know there are no more limitations’.”

Liquid Capital Principal

Recent clients staffing the healthcare sector, for example, say taking advantage of Liquid Capital’s invoice factoring services means they’re now able to stop worrying about cash flow.

Further, they can mitigate the challenges of waiting for invoice payments, allowing them to focus on growth — taking on new contracts, growing revenue and training staff.

There’s a reason we’re North America’s leading invoice factoring provider.

Need more information about invoice factoring?

We’re ready to help you meet any immediate cash flow needs. Get in touch with us to book a free consultation call, and discover if factoring is the right fit. Or visit our Invoice Factoring FAQ page to read the answers to our most frequently questions.