A TemPay client in Indiana was doing approximately $10,000 per week in sales prior to using the payroll funding company’s services. It had self funded the firm by maxing out credit cards to continue to maintain a limited client base. The client found itself unable to grow due to a lack of capital, as it was unable to gain traditional funding through a bank.
Why outsource payroll? When the client researched that question, it discovered that payroll funding companies provide full-service factoring that would fund 100 percent of its payroll and also pay all applicable payroll taxes. Outsourcing payroll not only eliminated potential credit card debt but also freed the owner from tedious administrative duties such as processing payroll and taxes with the filings required by local, state and federal levels of taxes. Now that the owner has time to focus on selling his company’s services, the business is doing approximately $250,000 per week in sales.
Most payroll funding companies offer two types of funding — money-only and full service. Money-only funding provides basic payroll funding without any added administrative services. Full-service funding, the type selected by the Indiana staffing firm, provides payroll funding plus services such as paying employees, filing and paying payroll taxes, invoicing customers and collecting from delinquent accounts.
The reason why full-service factoring is valuable for staffing firms of all sizes is because it allows staffing agency owners to focus on growing their business without the worry of doing mundane, time-consuming administrative tasks. This type of funding is especially beneficial for small firms and startups because these owners often wear many hats, and the time freed from administrative burdens allows them to focus more on building their talent base and selling their services — critical functions for any staffing firm’s success.