How Many People Does it Take to Run The Back Office of a Recruitment Agency?

Every Recruitment Agency knows it needs recruiters in order to operate but in order to keep the agency running smoothly there is a need for administration, invoicing and accounts staff.  When an agency starts it evolves from the directors or consultants doing some of the tasks, to then taking on a multi-tasking administrator.  As the business grows some of these roles will become individuals’ roles and in some cases become departments in their own right.  However all of these staff are non-fee earning and a cost to the business so deciding when to take people on and ensuring they have the correct qualifications and experience can be extremely hard to manage.

Below is a list of the potential roles required within a recruitment agency to ensure the full smooth running of the back office and accounts department:-


Raising contracts to secure contract and permanent placements is vitally important to ensure that the agency is protected and will be paid. When an agency starts they will get their staff to raise their own contracts but as an agency grows the time it takes to raise the contracts and get them signed by clients and candidates can turn into a full time role.  Hiring a Contracts Administrator can alleviate this and ensure that the process to get a signature is followed especially when the agency has a high number of contractors or temporary candidates.


Certain sectors within the recruitment industry require a high level of compliance before a placement can be made.  Making placements into the medical and teaching sector involves collating multiple types of documentation to ensure the candidate being placed is qualified for the position.  If there are only a few documents required then this can easily be done by either the consultant or the contracts administrator but as candidate numbers grow this can become too large a role.  Also certain documents or interviews can only be handled by qualified representatives so hiring this additional resource becomes a necessity.


Raising permanent placements or a low number of contractor invoices can be handled by consultants or directors in the early days but when the demand for getting invoices raised and candidates paid increases it is necessary to take on someone to manage this process.  Managing the incoming timesheets, processing the invoices, matching umbrella/limited company invoices, involving invoice finance companies and paying the contractors requires someone overlooking the process on a regular basis.


Chasing invoices and collecting funds is essential for any agency to maintain their cash-flow. It is not advisable for consultants or directors to be calling their clients asking about placements and following this up with chasing the same clients for payments therefore having someone separate collecting debts is important.  If the agency has a factoring arrangement this would involve the invoice finance company chasing the debt but it is advisable to review their dunning cycle to ensure that they are chasing the debt as quickly as you need.  If they are not it may be more cost effective and have a positive effect on cash-flow if you bring this in-house through a CHOCCS process or move to invoice discounting.


Keeping the books up to date and reconciling the bank account on a regular basis ensures that costs are monitored and the cash-flow of the business is kept in check.  Getting behind on the bookkeeping can delay the production of VAT returns and management accounts and in some cases cause costs to spiral out of control if they are not reconciled.


Running payroll for the contractors/temps or for the staff needs to be done correctly to comply with HMRC legislation and to ensure that the relevant taxes and national insurance contributions are taken and paid. As there are many permutations involved in processing payroll it is advisable to use not only some good payroll software but also have someone with experience in calculating PAYE payroll to ensure that all RTI submissions and year end processes are followed correctly.


LC1_8729Preparing statutory accounts and corporation tax returns is a company requirement which needs to be done by an internal or external qualified accountant.  Making the decision as to whether this needs to be an outsourced solution or an internal hire depends on the amount of accountancy questions that need to be answered or the qualification level of the person involved.  The level of service required by an external accountant would depend on whether the agency wants monthly or quarterly management accounts, monthly, quarterly or annual VAT returns and the year end statutory work.
The TBOS Complete model incorporates all of the services covered by the invoice administrator, credit controller, bookkeeper, payroll administrator and accountant in one easy to manage cost and in one combined solution.  The TBOS Complete model ensures the best expertise in each department from day one without having to take on internal staff or have multiple external providers.  As TBOS only provides its services to recruitment agencies we have the skills, software and resources to ensure that all the agency’s needs are taken care of.

For more information on how TBOS can help manage the back office and accounts needs of your agency please do not hesitate to contact us.

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