Making Work Pay

President Obama signed into law the American Recovery and Reinvestment Act to help stimulate America's economy. As part of this act, many Americans will begin seeing additional take-home pay as part of the Making Work Pay provision of the act. While the IRS has not mandated this change to be effective immediately, TempWorks Software has already implemented the new tax tables. The new tax brackets will result in a refundable tax credit of up to $400 for individuals and $800 for married taxpayers filing joint returns.

Unlike last years Economic Stimulus Package, the IRS will not send a check to each taxpayer, but employers will instead withhold less from the employee's checks. Read more about this new stimulus act on the IRS Website.

Is a tax credit in the form of less payroll taxes better or worse than a lump sum check like the one received last year? Leave a comment with your thoughts!

Factoring 101

We all know we are in a credit crisis. Getting loans from banks is difficult and expensive for companies who are growing beyond their own means and is virtually impossible for start-ups. So what happens when you get a Fortune 500 company signing a deal with your staffing agency for 100 temporary employees, but they pay on NET 30 terms? Well, your cash flow goes into the red! You need to pay those employees even if you haven't recieved payment on your invoice, but if you don't have the bankroll to cover it, you lose the deal. That's where factoring comes in to play.

A factoring company, such as Paperless Staffing comes to your rescue by offering to purchase your receivables and fund you within 24 hours. This lets you get your cash up front so you can pay your employees and not go out of business. Then, when the customer pays the factoring company, you get the reserve back.

An example would be you generate an invoice for $10,000.00. Your factoring company releases an initial percentage to you, say 85%. The remaining 15% is kept by the factoring company until payment is received. You now have $8,500.00 the day after you generated your invoice, so you can now make payroll! Your customer receives the invoice with the factoring company's remittance address on it and sends payment. The payment gets posted to the customer's account and a final release gets sent to you. This final release is made up of the 15% that was kept up front, minus the fees that the factoring company keeps as it's share. Tada!

Staffing agency owner's first instinct with invoice factoring is often, "My customer will think I am on the edge of going out of business." In reality, factoring means that you are exactly the opposite. It means that your business is thriving to the point where you need to bring in extra resources to continue to grow at the rapid pace you have established for yourself. And when you pair up with TempWorks Software, the industry leader in staffing software as well, you have managed to create a package of products and services that will leap you into the next level of business development and growth.