Why Invoice Finance works for recruitment companies
Recruitment companies, especially those mainly working in interim and contract placements, require a large capital outlay to pay workers before their clients pay them, putting a significant strain on cashflow. Recruitment Invoice Finance provides valuable recruitment agency funding to alleviate this financial pressure by releasing a percentage of an invoice's value within 24 hours of it being raised, and way before a client pays.
Managing risk is also becoming harder in a highly competitive environment where longer credit terms are becoming increasingly more common. When that risk is hundreds of thousands of pounds, having a Recruitment Invoice Finance Partner gives recruiters confidence in their agreements with clients, while allowing them to focus on finding the right people.
How recruitment Invoice Finance works
If you work in the fast-paced recruitment industry, you’ll be faced with finding the right talent for your clients while managing multiple costs causing cashflow challenges like payroll, operational expenses, and growth investments. Recruitment Invoice Finance is now a go-to solution for recruitment businesses, providing flexibility, stability, and opportunities for expansion.
Here's how Recruitment Finance works at Bibby Financial Services:
- Release up to 90% of the value in your invoices, giving you access to cash within 24 hours of raising them minus the agreed fee and PAYE reserve (if applicable).
- The cash accessed grows in line with your sales, and you can check your funding at any time with our 24/7 Client Online Service.
- With a straightforward fee based on your turnover and a flexible contract, you can manage your finances without worrying about being tied into a long-term contract.
Benefits of Recruitment Finance
The benefits of Recruitment Invoice Finance go beyond easing cashflow – positively impacting your business.
Agility for growth
Your recruitment agency needs to be agile, and waiting 30, 60, or even 90 days for client payments can severely hinder that ability and growth opportunities. Invoice Finance provides your recruitment company with immediate access to a significant portion of the value of your outstanding invoices. Having the value of these unpaid invoices before payment helps cover operational expenses, investment in talent acquisition, and the ability to explore new business avenues without being constrained by slow-paying clients.
Enhanced stability and predictability
When you’re waiting for payment, it’s hard to plan. Invoice Finance brings stability and financial predictability to your business by converting accounts receivable into a steady stream of working capital. With a reliable cashflow cushion, your business can weather fluctuations in client payment cycles, navigate seasonal demand fluctuations, and maintain a consistent level of service quality without compromising on financial stability.
Focus on core competencies
By outsourcing credit control and invoice management to an Invoice Finance provider like Bibby Financial Services, your recruitment company can redirect valuable time and resources towards your core competencies: talent acquisition, client relationship management, and strategic business development. Freed from the administrative burden of chasing payments and managing cashflow, you can focus on delivering exceptional recruitment services, fostering client relationships, and seizing growth opportunities in a competitive market landscape.
All sizes of recruitment agency
Invoice Finance is inherently scalable, as funding grows in line with sales, making it an ideal financing solution for recruitment companies of all sizes – from startups to established firms with expansive client portfolios. As business volumes grow, so can funding availability through Invoice Finance facilities. This scalability empowers you to grow your business sustainably without being constrained by traditional lending criteria or lengthy approval processes.
Mitigation of bad debt risk
Bad debt from client insolvency or default payments are genuine risks in the recruitment industry and can have severe financial repercussions on your business. Invoice Finance providers like Bibby Financial Services provide Bad Debt Protection to mitigate these risks. It’s a necessary safeguard that provides your recruitment company with peace of mind, enabling you to confidently pursue new business opportunities while minimising exposure to credit risk.
Plus, when you partner with the right Invoice Finance provider, your account manager can be a valuable adviser when working with new businesses. They can support in conducting due diligence when working with a new company so you can assess risk together. Here’s what to look for when searching for an Invoice Finance provider:
- A professional Invoice Finance company that specialises in the recruitment industry and understands the nuances of your business, clients, and transactions.
- Provides a dedicated account manager to discuss future opportunities to grow your business while reducing risk.
- A flexible funding line that can adapt as your business grows or contracts.
- An established provider with reviews from companies within your industry.
- A partner that offers bad debt protection and is transparent with fees and charges.
- Gives you access to online facilities to make managing your funding availability easier.
In the dynamic and competitive recruitment industry, effective cashflow management is paramount to sustained growth and success. Invoice Finance is a strategic financing solution that empowers your recruitment company to overcome cashflow challenges, unlock working capital, and capitalise on growth opportunities with confidence and agility. By providing immediate access to cashflow, enhancing stability and predictability, enabling scalability, and mitigating bad debt risk, Invoice Finance becomes an indispensable tool.
As the recruitment industry evolves, embracing innovative financial solutions like Invoice Finance will ensure sustained growth and success. Call 0808 501 6454 or fill in an enquiry form to see how we can support you.
