As crucial as recruitment finance is, all too many agencies fail to properly scrutinise the details of their current invoice finance arrangements. It means that your company may not know what a better deal even looks like.
If your agency is merely ‘getting by’ with its present invoice finance provider, now may be the time to review it in the context of your hiring firm’s needs, bearing the following factors in mind before committing to a new contract.
How much is your finance facility costing you?
While recruitment finance specialists are often all too happy to entice you with low service charges, the true cost of the deal they’re giving you may look very different.
There may be restrictions on the amount that you can drawdown against your invoices, for instance, which could be detrimental to your agency’s cash flow. Or maybe you are limited in terms of how much you can fund through a single client, which would be less than handy if they are your greatest cash cow. It’s also worth checking whether a renewal fee is needed to extend a contract.
What could be better about your current deal?
Think back to all of the issues you have had with your present recruitment finance provider, as well as how much easier your agency’s life could have been – and how much could have been achieved – if those problems hadn’t arisen.
Even being advanced all of your invoice’s profits straight away could make a big difference to how much financial freedom your agency has to grow, invest and place a greater number of contractors.
Have you done enough shopping around?
Recruiters often take great pride in their ability to sniff out a great deal, but are sometimes guilty of applying much more scrutiny to briefs and candidates than to their own invoice finance provider.
Your recruitment finance arrangements are one of the most crucial aspects of your agency’s back office, and it’s basic business sense to shop around and pore over the market before you commit to another lengthy contract with your current provider.
Is everything provided in a given package?
Even if a certain deal looks alluring, there’s a lot more than the finance that you need to consider. There are various ways in which a given recruitment finance specialist can take a little of the stress of day-to-day life off your business’s hands.
A certain provider may be especially strong in terms of the technology that they give you, for example, such a convenient platform for the management of your placements, accessible from wherever you are. Or what about the given company’s standard of customer support – are they responsive and helpful in response to any issues you encounter?
How expensive would it be to leave the deal?
You won’t want to commit to a contract that the recruitment provider has deliberately made it very difficult for you to escape. That’s why you do need to be sure of the exit terms before you sign on the dotted line.
It might be that you need to give a three-month notice period to leave, for example, with your margin being withheld during this period of limbo. Bear in mind, though, that there are ways around such issues and you shouldn’t stay with an unsuitable recruitment finance provider just because they place obstacles to you ceasing your association with them.
A range of basic and obscure factors alike should be considered when you are looking to ensure that you have the right invoice finance arrangements for your agency. Here at TBOS, we can help to set up the right agreements for you with leading recruitment finance providers, as part of our acclaimed TBOS Complete model.