Your staffing company is constantly faced with pending payments. If your cash flow is not properly managed, or if your business hits a slow period the gap between your incoming funds and sales can grow so large that catching up feels like a never ending chase.
Thankfully, there are many solutions that can help close the gap for good and grow your staffing business larger than ever before. Keep reading to learn about these 4 things you can do for your business to improve cash flow.
1. Provide Incentives For Fast Payment
There are so many ways that you can convince your clients to pay their invoices faster. By providing incentives like discounts, rewards, and more, your clients will be more likely to get you the funds for their services faster.
Your clients will see this as a way to improve their cash flow by saving some money, while you do the same.
2. Make Deadlines Clear
When issuing out invoices to your clients, make the terms of your payment spelled out very clear. There’s always those clients that take advantage of your unclear contract or agreement and are late for payments way beyond their due date.
Make the date, late fees, and interest crystal clear on each invoice. This will ensure that your business can get the funds it needs faster.
If you are still struggling with late paying clients, don’t be afraid to follow up. Give them a friendly phone call reminder. Offer to set up a payment plan with them to make their process easier. Although you will not get the payment in full, you will be able to get some kind of repayment coming in.
3. Reevaluate Your Clients
If you have a client that is consistently late, short, or negligent with their payments, take time to evaluate if it is even worth placing staff with them anymore. By cutting out clients like this, you will be able to give all of your attention to your best clients. You can build stronger relationships with them making it more likely for them to recommend others to your business.
4. Consider Financing
When you are stuck in a rut of slow or poor cash flow, consider financing. Rather than waiting up to 90 days to get financing through a bank, there are alternative types of financing that will get your cash faster. Staffing funding is a type of factoring service. With staffing funding, a factoring company will purchase your outstanding invoices to give you a 96% cash advance. This process typically takes around 24 hours or less.
Also, because the factoring company purchases your business’s outstanding invoices, they now take on the credit risk. If a client is late, short or does not pay their invoice at all, the factoring company will take the hit. This keeps your business safe from any damages caused by late payments.
Utilizing a service like staffing funding can help you better control your business’s cash flow, while also building a secure source of capital.
We hope that these 4 tips will help your business close the gap due to poor cash flow. Your business can not only control its cash flow, but also have the financial strength to grow larger.