Over the years of looking after the back office of recruitment agencies, TBOS has had many enquiries from new start up and existing recruitment agencies regarding when they should consider outsourcing their administration and accounts function of their business. Below are some of the signs that we notice in many recruitment agencies and the implications on the costs and running of the business:-
- Your evenings are spent raising invoices – Some agency owners will feel that having administrative support is an extra cost to their business so will resort to doing the administration themselves. However as the days are spent making calls and placements this means it is often done in the evenings and weekends which can have a detrimental effect on their social and family life (or not get done at all)
- You have to call your clients to chase payments before discussing new placements – By not having a credit control department it can often fall to consultants to chase their own invoices which in the eyes of the client could make your seem unprofessional or a small time recruitment agency.
- You don’t chase your clients for payment as they normally pay on time – By having the attitude that your clients normally pay on time will mean that some clients may start to exploit this and slowly increase their payment terms until finally they don’t make a payment until you prompt them. This can have a huge effect on cash-flow and make it harder to reclaim the funds at a later date.
- When your accounts person is on holiday no invoices can be raised – Often relying on one person to run all your administration and accounts can have a huge impact if they are on holiday, sick or leave unexpectedly so having a strong backup is important
- You don’t want to do contract placements as they seem like too much admin – If you don’t like doing administration then having to raise multiple contracts, process timesheets, raise invoices and process payroll and payments may put you off contract positions even though the rewards are greater and could make your agency more profitable.
- You have no idea how much money your company is making as you never get management accounts – A large portion of agencies will often engage a cheap accountant who promises management accounts on a quarterly basis which never materialise. Even when they are produced recruiters do not know what they mean, how to read them or whether they are making the profits they believe they are making
- Your expenses are in a carrier bag full of receipts waiting to be sorted – Recruiters are very good at spending money but not very good at recording and reclaiming this on expense claim forms. By waiting till the end of the year to account for expenses could mean that you may have overspent during that time or even be missing out on VAT which may be reclaimable.
TBOS works with many different size recruitment agencies to provide full back office services without you having to employ administrators, credit controllers, bookkeepers and accountants. As our service is only for recruitment agencies we understand the needs of the owners and can give help and advice along the way.
If you are one of the many agencies who identifies with this article, it might be time to outsource your back office and accounts! Please contact our office to discuss how TBOS can help overcome these issues to allow you to do what you do best… sell!