An internal back-office and accounting team is often seen as a "must-have" for most recruitment agencies. Someone there in the office, processing timesheets, raising invoices, making payments, chasing debts and completing accounting tasks, gives the recruitment director peace of mind, and the trust that these processes are being completed correctly and on time each month. Plus, should anyone need anything at the drop of a hat, walking up to someone's desk and requesting it face to face is quick and easy.

Lockdown considerations

However, when the government announced the lockdown, these agencies had to consider where and how their back-office teams would work. The only real solution was for them to work from home, which meant ensuring access to PCs and phones, and making sure they had everything they needed to continue to process their daily, weekly and monthly tasks remotely. This meant for the first time recruitment directors did not have their normal access to their back office team, and discussions and requests had to start being made by email or phone instead of face-to-face.


Another factor to consider was that many internal recruiters were now furloughed, meaning fewer placements were made, and contractor/temp numbers were decreasing, meaning the accounts teams had less to do each day. However, without being able to see and monitor this on a daily basis, it has been very hard for recruitment directors to decide whether these non-billing staff should also be furloughed. While the cost element to the business is an important factor to take into consideration, often accounts teams are dealing with processing timesheets, chasing debts and completing management accounts on the previous month's placements, so furloughing them immediately is not an easy decision to make.


As the lockdown eases, and recruitment directors make the decision on when to reopen their offices, many are evaluating how their business will look in the future, and the decision whether to continue to have a back-office and accounting team in-house is being considered. As directors have been without the daily face-to-face contact with their teams and realised the functionality doesn't have to be completed within the office, many are considering whether an outsourced service to cover these parts of the business would be a more cost-effective and secure system going forwards.


Using an outsourced back-office and accounting service to manage recruitment agencies' invoicing, payroll, credit control, bookkeeping and accounts, will often provide a comparable function to an internal team at a fraction of the cost. Outsourced functions are often based on transactional costs or percentage of turnover fees so they increase when the agency makes more placements and decrease when there are fewer, whereas an internal staff member's salary would remain fixed. There are also savings to be made on costs such as desks, computers, software, stationary, telephones and HR associated with having an internal team, and often space taken up by an accounting team could be filled with billing consultants instead.

TBOS provides a comprehensive back-office and accounting function to over 100+ permanent and contract recruitment agencies.  Please contact our office if you would like further information on how we can help your agency.


TBOS was approached by a £20m turnover contract and permanent agency with 200 contractors and 35 internal staff to see if outsourcing could be a consideration. Following discussions, the agency revealed it had six people internally including a Chartered Accountant and a number of processors with a total wage bill of £200k. TBOS projected that cost of an equivalent service would be in the region of £120k per annum, so there was an immediate saving. When they also factored in the desk costs and that they could fill the accounting desks with billing consultants, this made the decision for them.

Within three months of transferring, the agency saw their average debtor days drop from 70 to 38 days, and the directors said that they wished they had moved earlier as it allowed them to focus on growing their agency, making more placements and training their consultants.

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