There are many payroll factors to choose from, but it is important to take the time to find one that fits your staffing company’s specific wants and needs. Before choosing a factor, it’s important to evaluate both your company and the potential factor to ensure the relationship will be mutually beneficial. Here are 5 tips for choosing a reliable, and credible, payroll factoring company:
1. Assess your needs
Prior to beginning your search, review your company to determine which services you want and need. Do you want a strict payroll outsourcing company without any administrative management, or do you also want help filing payroll taxes and/or executing collections? Understanding your needs before beginning your search allows you to find the factor that best fits your company.
2. Tap your contacts
Learn about payroll factors straight from the source: your peers. Ask for referrals, whether anyone has used the factor and what the experience was like. This allows you to narrow your prospects and strike potentially negative companies off of your list.
3. Research the company
A quick search engine query can turn up any negative comments or news stories regarding the factor. Also, check the Better Business Bureau for reports. Look for experience. If a company has been in business for 20 years, for example, that is an indication that it most likely has the know-how to sufficiently serve your company. In addition, look at the payroll outsourcing company’s specialties. A factor that specializes in staffing firms will better understand your business’s unique needs and how it operates. If the factor does not specialize in staffing firms, ask how it plans to aid your specific business.
4. Keep communication open
A reputable factor will answer all of your questions and reply to your calls and emails promptly. Flexibility is key, and your factor should be willing to work with you by providing unique solutions that serve your company.
Customer service is also important. The factor should respond to your needs in a meaningful way and not just provide you with lip service.
Finally, ask about the company’s source of cash so you can be assured you will receive your funds. The company should be able to grow with you as your company gets bigger, providing additional funding and responding to additional needs as they develop. This is a main difference between payroll factors and banks. While banks provide a fixed loan or line of credit amount, factors should scale their funding to meet your needs with less approval time.
5. Review your options
Even if you are happy with your payroll outsourcing company, you should review your options annually. If you find a better rate, go back to your factor with the information. Chances are it will beat the price to keep you as a client. However, keep in mind that the factor with the lowest rate is not always the best one for your business, and you should consider service as part of your decision.