5 ways to improve staffing company cash flow

Cash flow is the bane of every staffing firm’s existence. In an industry in which employees and vendors are often paid weekly, customers can take 30, 45 or even 60 days to pay, creating a cash flow gap.


Consider these five ways to improve your staffing company’s cash flow.


  • Decrease payment terms. While terms can vary depending on the specific client and staffing industry, try to keep yours to 30 days rather than 45 or 60 days so you receive your payments faster.
  • Increase payable terms. Rather than paying bills as you receive them, wait the maximum time before paying your suppliers. This gives you a longer window in which to collect receivables and balance them with your payables.
  • Follow up on delinquent clients. Document and practice a clearly defined protocol for client payment procedures, applicable interest charges or fees, and dates at which these charges will commence. Include this information in client contracts that require a signature.
  • If clients miss a payment, contact them and politely explain that you have not received payment. Ask if they had any problems, and decide on a time frame in which you will be paid. Follow up again if you are not paid by this date. Also, consider offering to break the amount into smaller payments.
  • Check your pricing. When was the last time you compared your prices to staffing industry and competitor averages? If you’re below the average, consider a small price increase. While many businesses think this will drive away customers, most expect regular increases to keep pace with the cost of living.