Improved Cash Flow for Recruitment Companies

Credpro, a credit management company is on a mission to help recruitment companies improve their cash flow and beat the recession. Credpro provide credit management services that help recruitment companies survive the credit crunch by improving their cash flow and minimizing bad debt.

Credpro offer credit related consultancy and outsourcing services to recruitment companies, helping them get their invoices paid and paid quickly. Many recruitment companies are already using their Virtual Credit Control service, an outsourced credit control service saving small businesses the overhead of employing a credit controller, freeing up Directors to focus on core business activities and providing an expert credit control function for minimal cost.

Unfortunately recruitment companies do not always come top of the list when companies are deciding who to pay first. Some companies appear to use the competitive nature of the recruitment industry to delay payments to recruitment companies. They value their relationship with the recruiter less than the value of the money and are prepared to hold payment from a recruitment company as there will be a wealth of others who are more than happy to service their business. This is where consultants can really help your cash flow, by delivering a service that the client knows will not be easy to replace as they are then more likely to value this relationship and pay invoices on time.

For recruitment companies who are funding contractors and temps on behalf of a client, the exposure can be significant and delay in payments or non-payment could be critical to the survival of the recruitment company. It is imperative therefore that recruitment companies have an effective risk management process when issuing credit to customers to help identify and minimize risk should there be an issue.

Delayed invoice payments have become even more apparent recently as companies delay invoice payments to improve their own cash position. Recruitment companies should not forget their rights under The Late Payment of Commercial Debts (Interest) Act 1998 to claim interest and compensation on overdue invoices. A structured, pro-active approach to collecting outstanding invoices is a great way to make sure you are top of the list when your customers decide who to pay. It also helps develop relationships with customers, avoiding the destructive nature of aggressive collections or debt recovery.

ìAll too often we see recruitment companies who are worried about cash but with large sums tied up in delayed client invoice payments. If the first contact with the customer is at the point the invoice becomes overdue, it is tricky to start pushing for the money without seeming aggressive and potentially damaging client relationships. Credpro work with recruitment companies to help establish a simple but effective pro-active credit management processes. We have seen a dramatic improvement in the speed of invoice payments just by ensuring the invoice contains the correct information. Many smaller recruitment companies prefer to use our outsourced credit control service as it leaves them free to focus on core business activities while safe in the knowledge we are building strong relationships with their customers to ensure they are being paid quickly.î Commented Credpro Director, Will Humphries.

For recruitment companies looking for additional cash, before you look at alternative funding our advice is take a look at making the most from your existing assets, namely your cash that you customers are holding onto.