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.
great content Kevin. Mind if i put this page on the tempworks website?
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