2017 was a fantastic year for TBOS with many new recruitment agencies being set up and our existing clients experiencing brilliant turnover and profit growth. However, one of the main growth areas in 2017 was existing agencies who were looking to outsource their back office and accountancy processes to TBOS. This included agencies who already had financial arrangements in place or agencies who wanted to centralise their internal processes with one organisation. However, there were a few agencies in 2017 who came to TBOS as they were experiencing issues with their existing Pay-And-Bill provider and wanted TBOS to see if they could help. This meant not only looking at their existing costs and services, but often adding in the accountancy services which were not included by the Pay-And-Bill provider.
Below are 3 case studies of recruitment agencies that TBOS helped move from their existing Pay-And-Bill provider to the TBOS Complete service:-
- IT RECRUITMENT AGENCY
TBOS were approached by an IT recruitment agency who were experiencing constant payment issues to their contractors from their Pay-And-Bill company. Every month their contractors were either not paid on time or were not paid correctly which was causing the agency to spend their time resolving these issues instead of making sales. The agency also had no idea of the costs they had paid for the service as they did not have an accountant looking after their books on a regular basis. TBOS analysed the cost of their existing Pay-And-Bill facility and they were paying a service fee of 2.75% of turnover which over the first 9 months amounted to £22k (which did not include the cost of their external accountant). TBOS arranged an invoice finance arrangement and projected with the cost of a full back office and accountancy service, the service fee would come in around 1.35% with an annual cost of £15k – this was a saving of £14k per annum. Since moving, the agency has experienced no issues with their contractor payments and has monthly management accounts so they can both control and understand their business finances each month.
- EDUCATION RECRUITMENT AGENCY
TBOS were approached by a new start up education recruitment agency who were using a Pay-And-Bill company to raise their invoices and fund their invoices but each week (on a Thursday) they had to process the contractor payroll and pay the contractors themselves. This is due to the numerous payroll processing issues that they and their contractors had experienced at the beginning of their facility and the ongoing invoicing issues they had constantly been experiencing. The agency directors were also doing their own bookkeeping which was taking their time away from recruiting and growing their agency. TBOS analysed the cost of their existing Pay-And-Bill facility and they were paying a service fee of 2% of turnover, which over 8 months had amounted to £9k (which did not include the time they had spent running the payroll themselves). TBOS arranged an invoice finance arrangement and projected the cost of a full back office and accountancy service the service fee would come in around 0.87%, with an annual cost of £7k – this was a saving of £6k per annum. Since moving, the agency has doubled their contractor numbers due to the additional recruitment time they now have and they now understand their monthly profitability due to the monthly management accounts produced.
- FINANCIAL SERVICES RISK RECRUITMENT AGENCY
TBOS were approached by an existing agency who over the past 12 months had been using a Pay-And-Bill provider, but were concerned that as their contractor numbers and charge rates were increasing, the costs would start to escalate out of control. The agency also realised that they no longer required the funding provided by the Pay-And-Bill provider as they had a large cash-flow surplus from their permanent placements. The agency was not only paying for the Pay-And-Bill provider at 3.25% of turnover, but also paying for a part time bookkeeper and an external accountant, as well as the distraction of their internal consultants raising their permanent placements invoices. TBOS analysed their costs and projected their new cost by using the TBOS Complete solution (full time back office and accountancy solution) without using their existing external resources and there was an instant cost saving of £6k per annum (plus a cost saving of around 60k by not using the Pay-And-Bill Provider’s funding). Since moving, the agency has realised the advantages of having one company look after all the financial and processing parts of their business and now has consolidated figures produced by one source instead of multiple.
TBOS gets at least 2-3 enquiries per week from disgruntled recruitment agencies using a Pay-And-Bill provider who is causing issues with funding, raising incorrect invoices to the clients or making incorrect payments to the contractors. TBOS completes a full analysis of their current costings and service issues to see if we can provide its services. Due to the TBOS pricing structure (per week per contractor) if the agency is providing contractors, is paying full time temps or has a large number of workers each week then TBOS will often be much cheaper and provide a more comprehensive service. Also, with the additional services of credit control, management accounts, VAT returns and year end accounts all under one roof, this then provides a complete solution that the agency can use to grow their business.
For more information to see how TBOS compares to your existing Pay-And-Bill provider, please contact our office.