Choosing a recruitment factoring company
If you’re considering recruitment factoring or recruitment discounting, always remember that what you’re really looking for is a long-term partner for your company – one who understands how you work and can help you succeed.
Make sure you carefully compare different companies, and always bear in mind just which services you actually need. Are you just looking for finance, or do you want a comprehensive solution that takes care of the admin and lets you focus on recruiting?
Simply going with the cheapest provider rarely pays off – you should ask about their previous experience and, if you operate within a particular sector, whether they have previously worked with recruitment businesses operating in that sector.
Make sure you go through the terms and conditions with a fine-tooth comb. You never know what extra charges and fees might be lurking, so make sure you understand what you’re signing up to. If there’s anything that puzzles you, make sure to ask – a good recruitment factoring company will take the time to explain any financial jargon.
It’s also really important to find a recruitment finance company that suits the way you work. As Caroline Plumb, a recruitment industry veteran and CEO of cashflow management software company Fluidly, explains:
“You normally have to confirm timesheets with the lender. Sometimes they will then confirm it with clients. If not, they may want you to raise timesheets on their systems. Or, if you’re lucky, they might do it on trust, so long as they know you have a process in place for managing timesheets.
“If a structured process to timesheeting or an existing relationship with a payroll company is not how you operate at the moment, it can be a pain.”
So, make sure you check how that process would work with different recruitment finance companies.
Finally, Caroline advises: “Another thing to bear in mind is that invoice finance companies in recruitment prefer to fund contracts rather than permanent roles.” So, again, check that your recruitment finance company is happy with your business model and any future expansion plans.
This extra diligence will pay off later, as the last thing you want is to be stuck in a funding agreement that doesn’t work for your business.
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September 4, 2020 at 05:31AM by Alec Hawley, Khareem Sudlow
