Recruitment Insights

What is payroll funding for staffing companies?

August 11, 2022
What is payroll funding for staffing companies

You run a tight play when it comes to cash flow. You call clients to follow up on invoice payments, your next pay cycle sits a few days away, and you have taken on more work, which means more staff and another round of waiting for client payments.

Waiting up to 60 days to have invoices paid might be a fact of life for staffing companies, but struggling to pay your staff as a result does not have to be.

How payroll funding benefits staffing companies

Staffing companies often face cash flow challenges while waiting for clients to pay. How will you pay the staff on your payroll? What about hiring more people and taking on more projects? Is it worth applying for a traditional bank loan or overdraft to cover these costs?

Payroll funding solves these problems in the following ways:

  1. Consistently meet payroll obligations: You must meet payroll obligations on time to retain staff; otherwise, people become dissatisfied and seek work elsewhere. Payroll funding ensures you avoid late payments by providing the funds needed to meet your payroll obligations on time.
  2. Avoid core debt: Payroll funding is not a traditional loan, which you may struggle to secure and pay off if you are a smaller staffing agency. When you engage with a payroll funding solution, you are not borrowing but merely getting an advance on money owed to you. Instead of engaging with traditional business loans or overdrafts, you can secure the funding needed without going into debt.
  3. Invest in other parts of the business: When you struggle to procure the necessary funds to cover payroll, investing in other parts of your company is not easy. With payroll covered, you can divert funds elsewhere. For example, you may use the extra cash to purchase new equipment.
  4. Expand your team and grow your business: Payroll funding gives you the peace of mind to hire new people without worrying about where their wages will come from, so you can take on more work and expand your business.

When meeting payroll costs is no longer an issue, you can build the trust of your team and stay ahead of your competition.

Payroll funding solutions integrate with your systems

When you establish an account with a payroll funding provider, they will integrate their payroll funding solution with your timesheeting and payroll systems.

When you need funding to fulfill your pay run, you can easily request and receive the cash needed to pay your staff. You can even automate the process and have your funding automatically transferred into your bank account to be ready for each pay run. By integrating your back office systems and tasks, payroll funding allows you to focus on your core operations and objectives rather than the stresses of managing payroll.

When you integrate payroll funding into your existing solutions, APositive can do more than simply plug in the capabilities and features. An experienced consultant can help you to look for gaps in your back office processes and offer resolutions or suggestions for a complete overhaul depending on your needs. Setting up the integration takes minutes and you can then have 24-hour access to comprehensive reports and request funding at any time. Funding can be available immediately when you raise your invoices.

What types of staffing companies can benefit from payroll funding?

Staffing companies that provide temporary or contract talent can pay the staff provided without waiting for their client to repay them. Such a solution becomes particularly helpful when you need to hire many people at once.

Staffing companies from various industries can benefit from adding a payroll funding solution to their business. The solution can serve them in the following ways:

  • Labour Hire companies run a tight timeline from signing of timesheets to billing to paying the payroll. Ensuring funding is available in time to meet payroll each week or fortnight is a continuous juggle. Payroll Funding providers can help you enhance your tech systems and processes, and integrate funding into your systems and timelines, ensuring payroll is paid on time, every time.
  • Traffic management companies often take work from construction companies or the local council to direct traffic flow during disasters or roadworks. However, these payments will not come through immediately, leaving the company without the funds necessary to pay its employees. Payroll funding can provide the cash flow needed to complete payroll with consistency.
  • Civil contractors might have several teams working on different projects at any time. A payroll funding solution can integrate right into your timesheet and billing processes to ensure each person receives the correct pay on time for the hours worked.
  • IT contractors and consultants have found themselves in high demand as workplaces and businesses have turned to technology to keep operations running during the pandemic. IT contractors can leverage payroll funding to ensure they have the right number of people to meet demand and keep their business growing while waiting on payments from completed projects.
  • Security companies provide valuable services to venues, and your payroll must be as robust as the team you employ. Payroll funding can help security companies by providing them with the funds they need to pay their employees on time.

APositive’s Payroll Funding solutions for staffing companies

Our Payroll Funding solution provides you access to the money stuck in unpaid invoices. We also deliver a tech-integrated back office solution with outsourced payroll options to remove the administrative burdens of managing it yourself.

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