“What will your customers think if your staffing company uses invoice factoring?” In today’s business environment the credit management benefits a factoring company provides are a value add for staffing company customers . Staffing companies in all stages of development utilize invoice factoring to support their working capital needs, and in turn provide their customers with an easy, streamlined solution to invoice processingExperienced accounts payable professionals are most likely to be familiar with invoice factoring and appreciate working with the efficient A/R management practices of a factoring company.
A perception of financial stability
All businesses require some form of financing, no matter what business development stage they are in. Your customers know that staffing companies often use invoice factoring to maintain positive cash flow and fund the high priority of meeting weekly or bi-weekly payroll. Knowing your staffing business has secured ongoing financing often signals strength and stability rather than weakness. Your company will be recognized as a financially healthy business, rather than one that is struggling day to day to manage cash flow. With factoring, your customers continue to give you their business because they know, in advance, that you are financially capable of meeting payroll without delay.
Maintaining healthy, positive relationships with your customers
Most successful staffing businesses grow by carefully serving their customers and managing their customers’ perceptions. Professional factoring companies understand the importance of your customers and place great efforts in maintaining healthy, positive relationships. Professional, well-mannered communication is one of the hallmarks of a reputable invoice factoring company. It is in the best interest of the factoring company to deliver the highest levels of expertise and service, not only to your company but also to your customers. Acting efficiently to improve accounts receivable management, trained professionals track, monitor and if necessary reach out to your customers for payment. Any serious issues will be discussed with you confidentially and handled appropriately. Having a third party partner responsible for collections separates your staffing agency from the task of having to chase your custmers – instead, you are free to concentrate on your core business of placing workforce talent.
Notification is a common and acceptable practice
Notification is common in invoice factoring. Notification occurs when the factoring company notifies your customers that their payments for the services you provide should be paid to your factor, instead of being paid to you. Some staffing agencies that are new to invoice factoring have the concern that if the factoring company contacts their customers, they will think your staffing company is in financial trouble. The truth is, because invoice factoring has become mainstream, your customer’s accounts payable departments deal with this all the time and take it in stride. How smoothly notification goes with your customers depends greatly upon the experience, methodology and professionalism of the factoring company you have chosen.
Invoice factoring benefits your company and your customers
Rest assured that the benefits of invoice factoring are applicable for both your staffing company and for your customers. Many of your customers are likely to be larger firms that have worked with factoring companies before. They understand that a factoring company is well versed in the accounts payable/receivable process and has years of experience in managing collections. This intimate knowledge of the invoice process makes your customers’ jobs easier.
Choose the right invoice factoring company for your staffing business
Look for a highly reputable factoring company like eCapital that specializes in providing the staffing industry with low cost funding solutions to improve cash flow. The best factoring company for staffing will provide cost-effective services that are convenient to use, simple to understand and easy to manage. In addition to supporting ongoing operations, the right factoring company will provide the financial ability to improve business development and grow. Confirm that the factoring company will provide a dedicated accounts manager to ensure that both your staffing agency and your customers receive superior customer service. Choose a reputable factoring company with experience serving your industry and solid financial backing – you’ll benefit from trusted advice to help with credit decisions, expedited funding to meet payroll and professional accounts receivable management to improve collections.
For more information about convenient, cost-effective funding solutions for staffing agencies, visit eCapital.com