Recruitment

How can Invoice Finance benefit the Recruitment industry?

It is the same scenario you see time and time again – you have sent out staff, sent out your invoice and then you may need to wait 30, 60 or even 90+ days to receive those funds. Your growth is halted; if you had received the funds immediately, you could be sending out more staff for work as you would have been able to pay their wages sooner.

This is where an invoice finance facility could help. Instead of waiting for and chasing your debtors to pay, you could receive up to 90% of your invoice value that same day. So, how does it work?

Step-by-step guide to invoice finance

1.       Send your invoices

Firstly, you send your invoice to your customer, and another copy to your chosen lender.

2.       Receive up to 90% of the invoice value

Depending on the terms agreed, you will receive up to 90% of the upfront invoice value on the same day as when you issued the invoice.

3.       Your customer pays their invoice

Your customer pays their invoice within the agreed terms of 30, 60 or 90 days.

4.       You receive the remaining 10%

Once your customer has paid their invoice, you will receive the remaining 10% of the invoice minus the lender’s fee.

A made-up example: Super Staff Ltd

Super Staff Ltd have sent supply teachers to different schools and send an invoice of £10,000 to their customer. They expect the invoice to be paid after 30 days from the end of the month. In the meantime, Super Staff Ltd receive a phone call requesting 10 more supply teachers for another school the following week – but they don’t have the cash flow to be able to pay the staff for that week, as they haven’t received payment for the first lot of supply teachers.

Fortunately, Super Staff Ltd have an Invoice Finance facility. They send a copy of the invoice to their lender and receive £9,000 that same day. They can hire the new staff ready for the week ahead and pay them at the appropriate time. After 30 days, the lender receives the invoice payment and sends Super Staff Ltd the remaining £1,000 minus their fee.

Having the Invoice Finance facility has meant that Super Staff Ltd have been able to grow their business incredibly fast compared to if they were having to wait to be paid for the staff they had already provided.

How do I get an Invoice Finance facility?

This is where Contact Business Finance comes in! We have a wealth of knowledge in the world of Invoice Finance and can put you in touch with the most suitable lender. In a free-of-charge service, we will compare the market for you to find what would be best for you and your business.

And it’s not just Invoice Finance we can help with – we can look at business loans, asset finance, trading finance and more.