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Recruitment consultants know all about the pressures of cashflow. Whether it is a permanent search and selection practice, a contingent recruitment company or a temp agency, nearly all will have to make regular payments to staff and suppliers, as well cover overheads, while having to survive extended periods waiting for clients to pay on contracts. Peter Ewen, Managing Director of Venture Finance outlines the key cashflow solutions for recruitment firms.Recruiters commonly use invoice finance to relieve the pressure of restricted cashflow by providing frequent funds against unpaid invoices, as soon as they are issued. These services have long helped recruiters stay afloat and grow. What are the key areas, then, that will maximise the impact of an invoice finance facility and preserve cashflow, even in the most difficult of times?Credit controlIt is vitally important for recruiters to ensure sales are converted into cash as quickly as possible. The key is a proactive approach to credit control. If your customers are simply paying late �C rather than renegotiating longer payment periods �C then you should be taking steps to ensure they make good on their debts and that they do so on time.As well as improving cashflow, having a Factoring arrangement in place takes away the headache of managing a credit control operation. Rather than wasting valuable management time chasing clients for payment,
Christian Louboutin w. Rhinestones Black Louis Suede Sneakers, it allows recruiters to outsource that chore to the specialists, who will provide a dedicated credit controller and operate to your business��s desired style of collection. This can mean that debts are settled much more quickly. Credit control is a core activity for Factoring providers, who typically ensure that debts are settled on or ahead of time.One inevitable consequence of the downturn is an increasing number of companies addressing their own cashflow difficulties by delaying payment to their suppliers. Thus, the company that used to pay 30 days after receiving an invoice may now hold off on payment for 45 or even 60 days. The evidence that late payment is on the increase is more than anecdotal. According to an independent survey of accountancy firms carried out on behalf of Venture earlier this year, almost a quarter of Britain��s small and medium sized companies have seen an increase in debtor days. Of those who were affected, the average increase in payment time is 21 days. This kind of delay can have a serious impact on cashflow.If a business generates the greater part of its revenue from just a handful of large customers,
Christian Louboutin Classic Ebony Patent Artificial Leather Boot, late payment by even one of them will affect the amount of working capital available. The cheque for several thousand pounds that was due to arrive at the end of June instead makes an appearance in the latter half of July. Meanwhile, the hard pressed business struggles to pay bills and meet weekly staff wages.It is also worth mentioning that recruiters can combine a Factoring or Invoice Discounting facility with Bad Debt Protection to shield against a customer failing to pay due to insolvency.Contractual clarityAll recruiters should be absolutely clear about the terms and conditions of any customer contracts. When new customers come aboard you should ensure that you are in a position to meet contractual obligations and are comfortable with the proposed payment terms. In an ideal world, you should be able to stipulate your payment requirements, but there is always a balance of power in negotiations. In return for a major order you may well have to swallow more days of credit than you would prefer.It��s also worth finding out as much as you can about your client��s processes. When do they process invoices? How many cheque runs do they have every month and when is the money sent out? By knowing this you��ll have a better idea of when to expect payment and your cashflow will become more predictable as a result.And finally��Before signing on the dotted line with a new client, recruiters should be sure they have the finances in place to cover the gap between invoice and payment (traditionally where invoice finance can assist). However,
Christian Louboutin Newest Belle Suede Ankle Boots, you can also improve your cash situation by ensuring that as many clients as possible pay on 30 day terms. This will mean that those who do pay over 60 or 90 days will have less impact on your cashflow. Equally, you should look closely at your credit control processes. Invoices should be sent promptly when work is completed and the date for expected payment logged on your system. When payment is due,
Christian Louboutin Woderful Women's Orniron Ankle, it��s important to chase the cheque.
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