If you run a staffing company or a temporary employment agency, you require working capital to cater to recruitment expenses, hiring expenses, and payroll expenses. It’s safe to say that if your clients have long net terms, you may find it pretty difficult to cover these expenses. However, this doesn’t have to be the case. If you own a staffing firm and most of your clients have long net terms, you can raise the funding you need by selling your receivable accounts to a factoring company. A factoring company is a third-party company that purchases outstanding invoices from companies requiring cash inflow but have debtors with long net terms. Once a factor purchases outstanding invoices from a given company, it takes up the responsibility of collecting payments on these invoices. As their fee, the factoring company keeps a portion of the amounts they collect.
There are plenty of factoring companies that major in staffing factoring. Before settling on a given firm as your factoring company of choice, you must ensure that it possesses the following qualities.
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If you’re searching for a factoring company, you should look for one with knowledge of how your industry operates. This is because such a company will find it easy to work with your customers. Given that experienced companies are often the most knowledgeable on how different industries operate, you should settle on an experienced factoring company when looking for one.
Adequate Room for Growth
Over time, your business is bound to grow. To avoid having to jump from one factoring company to another, the factoring company you select should be one that can accommodate your business’ growth. If you select a factoring company that can accommodate your company’s growth, you can rest assured of having a long-term partner.
Proven Track Record
Across all industries, companies with remarkable track records tend to deliver better services than their counterparts with poor track records. As this is the case, if you’re searching for a factoring company that can provide you with exceptional staffing factoring, you should look for one with a remarkable track record. It’s worth stating that if you settle on a factoring company with a proven track record, you need not worry about being let down.
A good number of factoring companies usually contact their clients’ customers via email, letters, and phone calls. However, not all customers appreciate being contacted through these means, as the chances of misunderstandings occurring are rife. Most, according to studies, prefer being approached by a professional face to face. Therefore, when looking for a factoring company to partner with, you should select one with well-trained and professional representatives who can meet and agree with your customers.
Your factoring company of choice should ease your financial stress, not increase it. Hence, prior to selecting a given factoring company, it’s in your best interest to get conversant with fees. If the company you settle on demands excessively high fees, you’ll constantly regret your decision as they’ll become a financial burden.