Running a staffing agency takes time. Don’t start until you’re ready. When you are ready, Scale Funding is here for you.
5 Keys to Successfully Operating a Staffing Agency
Know the Business and Prepare for Success
Running a staffing agency takes time and resources. Don’t start until you’re ready.
Have your management solutions established for processing payroll (or paying contractors), calculating, and paying taxes, and having proper insurance.
Have a Plan to Grow
An agency with only a few employees won’t be profitable for long without the necessary time and tools.
Plan your growth: Before you launch, have sales and recruiting strategies in motion with written contracts secured and committed candidates ready to onboard.
Understand Customer Credit
Know whether your customer can pay you in full, and on time. Don’t overextend time and resources to a customer who can’t pay for your service.
Adhere to well-informed credit limits.
Request bank and trade references when you sign up a customer. It’s a simple form that businesses are used to filling out and will help extend accurate credit.
Don’t put your financial future in the hands of just one customer.
Know How to Invoice
Customers don’t pay invoices that are wrong. Make sure your invoices have the proper information, so you get paid on time.
Get all your terms in writing, including payment terms and rates. The rate card should detail regular, OT, holiday and special rates for each position staffed. If anything changes or positions are added, get a signed amendment.
Make sure your invoices match your contract terms exactly.
Use software for timekeeping and reporting payroll.
Get your timecards approved by the customer, either by signature (which can be electronic) or by email.
Understand Payroll Funding
Payroll funding (also called “factoring”) is not a loan—it is selling your accounts receivable at a small discount (the factoring fee) to get the cash you need to make a growing payroll.
The funding company will collect what’s owed on your accounts directly from your customers. So, you’ll need to provide the proper contact for communications and let your customer know to expect a call before you can get funded.
A good factoring company provides services that make your (and your customer’s) life easier: credit advice, invoice review, courteous communications with customers about open accounts, online tools to upload invoicing, and real-time reporting of open and collected accounts.
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