Staffing companies have a very difficult job. A staffing company always has to have people ready to go on the next assignment. At the same time, they have to manage a very complex payroll of many different workers. It is often the case that a staffing company will not be paid until 30 days or more later, but their workers need to be paid weekly. It happens all the time and it puts staffing companies in a very compromised position.
They have all these accounts receivables coming in, but they often do not have the funds on hand to pay their staff. What is a staffing company to do when this happens? The solution to this problem is to use a staffing factoring company. Staff factoring will give a staffing company the money that they need. It will allow them to immediately handle the payroll issues that typically cause them a lot of stress.
One huge benefit of staff factoring is that a staffing company has everything in place to receive payment, they just don’t have the money on hand to easily pay their entire staff. Because a staffing company will have all of these accounts receivables, that gives them a lot of power when it comes to finding a solution to their payroll issues.
A factoring company will look very favorably on a staffing company that has a lot of accounts receivables. This will allow them to know that a staffing company is doing a good job, that their business is successful, and that the factoring company can quickly recoup the money that they give to the staffing company to meet their payroll requirements.
For both parties involved, it is a win-win situation. It allows the staffing company to meet their payroll requirements by allowing a factoring company to receive their accounts receivables, it allows the factoring company to earn interest on the money that they lend to a staffing company while receiving that company’s payments.
Making payroll is often a huge problem for staffing companies, matter fact it is a huge problem for the majority of small businesses. It is because of this that handing over all payroll services to a third party is typically a great idea. In many cases, a factoring company can take on all the payroll responsibilities for a staffing company.
They can handle all your accounts receivables, they can make deposits to your business account for you to handle payroll. In return, they simply give a company an ongoing loan, which they collect a small bit of interest, but it allows the staffing company to always have enough money to quickly meet their week-to-week payroll requirements. For many companies, this is one of the best deals around.
For any staffing company that has faced a payroll situation, they know that it is very serious and that it can harm their reputation. When you are not paid until 30 days after a service is completed, and your workers need to be paid weekly, there is a dilemma. This dilemma is alleviated by using a factoring company.
A factoring company will collect your accounts receivables, they will extend a loan to your company, they will charge a small amount of interest, and your company will be able to quickly and immediately satisfy all of their payroll responsibilities. For several staffing companies around the country, they consistently work with the same factoring company to handle their payroll issues. It allows them to outsource the receiving of their accounts receivables, getting that money a lot sooner, and being able to meet the day-to-day financial responsibilities of their company.