You probably have some degree of experience with the dreaded performance review. You might have been on the receiving end at an earlier point in your career, or you’ve more recently reviewed the performance of your own staff. But have you ever conducted a performance review of your staffing agency funding mechanisms? Maybe it’s time.
There’s little that’s more critical to your company’s bottom-line results than your cash flow management strategies. After all, your temporary staffing services come with the challenge of meeting payroll demands on a weekly basis, while you’re not getting paid by your clients for 30, 60 or 90 days — and sometimes longer. Do you have a staffing agency funding relationship that can meet such an ongoing challenge?
You need to make sure your funding relationship is a dependable one — one that will smooth out those cash flow hiccups that can keep you up nights. And once you’ve established that relationship, you need to periodically review it to make sure it can keep up with your needs as your company grows and evolves. Here are some questions to ask during your staffing agency funding performance review.
- Do my current funding terms reflect my present-day profile? If you need cash weekly just to meet payroll, can you obtain needed funds with the same urgency? Try to draw a mental picture of your typical working capital needs and your funder’s ability to meet those needs, and make sure the picture isn’t the least bit fuzzy.
- How quickly can I increase my available staffing agency funding to take advantage of rising opportunity? Staffing agency funding needs can increase dramatically when times are good. As the economy heats up or you gain a major client, the good news/bad news is that you have the opportunity to place more temporary assignments. Your payroll rises, and once again, it’s at a faster pace than the rate you’ll be paid by clients, and you could quickly burn through a credit line from a traditional lender. Do you have to reapply for an increased limit every time that happens? How long would that take? On the other hand, rather than going to, or staying with, a traditional lender, a payroll funding company can provide needed funds on a quick turn-around basis. Your staffing agency funding performance review should answer those key questions before the need arises.
- Am I being charged the most competitive fees in the marketplace? Even if you think you’ve established a good source of working capital from a payroll funding provider, you should periodically review your terms. How competitive is your present deal? Could you do better?
- Is my staffing agency accounting software keeping up? You’re not done until you’ve made sure that your accounting software passes muster. Back-office performance is an integral part of your staffing agency funding mechanism, and you need to make sure that your software enhances your productivity in billing, accounts receivable, collections, cash flow reports and other back-office demands.
Once you’ve conducted your staffing agency funding performance review, you’ll know where your company currently stands — and where it needs to go.
As a full-service payroll funding, invoicing, payroll taxes and credit monitoring resource, TemPay enables staffing agencies to focus on growing their businesses. Check-out our handy Resources section for much helpful information, and apply for credit for staffing agency funding here today.