Teacher staffing company factoring is a financing tool that enables a temp employment or staffing agency to gain access to money tied up in unpaid customer invoices. The main benefit is speeding up cash flow, but it’s not the only one. Find out how teacher staffing company factoring works and when the best time is to use it.
How teacher staffing company factoring works
As with any form of invoice factoring, teacher staffing agencies can unlock money represented in unpaid accounts receivable invoices without waiting for customers to pay. As early as the first day an invoice is generated it can be sold to an invoice factoring company. The factoring company, in turn, provides an advance to the teacher staffing agency for a small fee (called a factoring fee).
Although the fee is assigned at the time of factoring, the factoring company doesn’t receive the fee until the customer pays. When the customer pays the invoice weeks later, any amount held in reserve (minus the factoring fee) is also returned to the teacher temp staffing agency. Here’s an example of how the staffing invoice factoring timeline plays out:
Day one
- Generate a customer or client invoice (or earnings statement) and factor it
- Get an advance (usually about 95% of the invoice amount but could be as high as 98%)
Day 30-45-60+
- Customer remits payment to the factoring company
- Any amount held back (except for the factoring fee) is returned to you
We work with some of the best staffing factoring companies in the US, especially for temp employment and staffing agencies looking for a combo with great customer care, low factoring rates, high advances, and fast funding. Complete our online invoice factoring application to get started quickly or scroll down to the bottom of this article and complete our quick quote form by telling us just a little about your staffing company. The staffing factoring companies we work with offer:
- Competitive factoring fees (as low as 2%) and advances (up to 98%)
- Fast, same-day funding
- No hidden fees or ticky-tack admin fees to drive up the cost of factoring
- No long term contracts or crazy-high penalties if you decide to stop factoring
- No factoring minimums – only factor when it’s best for your business
- Fantastic customer service to keep your business for the long term
Why invoice factoring is ideal for staffing, temp employers, and recruitment agencies
Invoice factoring is an ideal tool for many industries, but maybe none more so than staffing. And in the staffing industry, it’s even more so for teacher staffing companies, mainly because of your time requirements. You have all the headaches of a temp employment or staffing agency and more.
A business staffing agency or temp employment or recruitment business often has the luxury of at least a few days, if not weeks, to get a temporary or substitute worker ready for placement. As a teacher staffing company, you have to recruit, screen, vet, interview, and line up candidates in advance so they can be called in immediately, even on the same day, when needed.
Your expenses are so far up front, and to compound the cash flow issue, your invoices could take weeks or even months to get paid, especially when dealing with government clients such as public schools and universities. Even just landing the contracts is a huge expense that you don’t see a return on for months.
This is why teacher staffing company factoring is such a great cash flow financing tool. It helps you better align revenue with expenses and speeds up cash flow.
It’s also very flexible. You might want to factor invoices all the time or you might just need an occasional solution for meeting a large payroll or filling a large client order, like needing to hire hiring multiple workers all at once for a large project. In fact, many staffing, temp employment, and recruitment businesses rely on invoice factoring as a form of payroll funding, or a payroll loan, in cases such as those.
With expedited cash flow also comes other benefits. As we mentioned, it could be the key to taking on a big client or filling larger customer orders. It allows you to take advantage of your vendors’ quick pay or cash payment discounts, such as for office supplies, pantry and coffee services, and so on.
You can factor when your agency needs a chunk of money to offset an unexpected expense, like a facility repair. You can also factor staffing invoices to gain access to working capital when you have a fast-emerging opportunity to grow or expand.
There’s even a name for not factoring: opportunity cost. Opportunity cost is represented by any opportunity you miss out on while waiting for customers to pay. Not being able to take on big orders or big clients, not being able to get quick-pay discounts from suppliers, not being able to act when you have a chance to grow or expand—all from lack of working capital—is the opportunity cost of not factoring invoices.
Staffing invoice factoring calculator
To get an idea of how much money you can free up through teacher staffing company factoring, enter the amount of an average client invoice (or your total monthly invoices) below. The invoice calculator will show you how much working capital you could unlock immediately, without chasing customer payments, as well as what the factoring fee might be.
Ready to apply? Apply online or supply a few details below and we will go to work and source the best staffing factoring companies to get you a free, no-obligation quote. Quote in hand, you can decide whether factoring is a good solution for your company.
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