Opportunity for Recruitment Growth with Factoring

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Recruitment agencies may have suffered a fairly quiet few years, particularly those specialising in contract workers for the building and construction industry. Many projects were put on hold when the financial crisis struck and their revival is only just beginning to happen. The signs are good for those agencies that have maintained profitability, albeit perhaps reduced, through some lean years and have the workers ready for placement. You need to be picking up the phone and start ringing around.


Cash flow

One of the problems that every recruitment company faces is the time lag between paying their contractors on a weekly basis and receiving their money from the client. Normal trading terms between businesses are monthly invoices with 30 day credit facilities. Even if your client pays strictly on time you will have paid out on weeks 1, 2, 3 and 4 and will receive your money at the end of the next month, weeks 7 or 8.

That shortfall will be put into your forecast and cash flow each year but it is still far from ideal. The answer is recruitment factoring whereby your money is released as soon as you raise the invoice and the credit control function then becomes the job of the factor. Whilst it will obviously involve a cost you can do your own sums to see that it gives you access to your finance more quickly and hence it can be used for your own business development.

Look at the details

If you find a company with experience specifically in the recruitment business, someone like http://www.cashsimply.co.uk/improved-cash-flow/ then you will have a mutual; understanding of the business. It may be that as the construction industry starts to move forward again there is an increased demand for workers. You will perhaps have the opportunity of a big contract that superficially looks a real opportunity. It will only be a real opportunity if it is not going to tie up your finances so you cannot meet your obligations.

You may not know how quickly this new client will pay; your quotation can be much keener if you know that your money will come on a specific date because you are factoring.


One of the benefits is receiving your money on an agreed date but another is certainly the time it frees up for you to develop and expand the business at a time of real opportunity. Every business has been formed because of the expertise of the company and its owners. The non productive time that is essential to each of these companies, administration and compliance with statutory obligations, can be far better spent focusing on growth as long as there is an alternative to handle those issues.

This is a crucial period for business. Growth is here and there are also calls for more initiatives to solve the housing shortage by encouraging more building and less planning obstacles. It adds up to the need for more labour and someone to provide it.


Image attributed to        Freedigitalphotos.net Stuart Miles




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