One of the singular most important things for a business is its cash flow - a company with cash collapses. One of the biggest challenges of setting up and running your own recruitment businesses, particularly if you are going to be supplying temporary workers, is having enough cash. Here we examine the top eight. ways to increase cash flow:
1. Understand your Online accounting package:
A business needs to know and fully understand the exact financial position and how the cash flows through the business. If you understand this you can then manage your cash flow and potentially make improvements.
2. Credit Control:
A successful credit control function is crucial and critical for every business. Your customer owes you, so you’re extending them credit – but you’re trying to do it in a controlled way. Credit control is a delicate balancing act. While it’s important to get your money as soon as possible, customers might leave if you’re too aggressive. Quba Solutions understand this and is why we allocate a dedicated credit controller to each and every agency partner.
It sounds simple but many clients make simple mistakes and leave out vital information (such as a purchase order number). This will result in payment delays. It’s about getting the basics right, the net result of which will result in your debtor days reducing and therefore improving your cash flow.
4. Credit Checking:
Only work with clients that have a good payment history or are credit worthy, avoid working with clients that may not pay on time or indeed pay at all. If you have signed up to contracts with poor payment terms or low margins then it would be wise to review these clients and make a commercial decision to potentially cease trading.
5. Insure your debt:
Even the largest companies can easily end up in liquidation or administration. Here at Quba solutions we work with the largest and leading insurer to ensure your agency is protected in the event of an insolvency.
6. Terms of business:
Make sure you have clear and appropriate terms of business in place before working with any client, without this it will leave your agency exposed in the event of a dispute. Quba has a unique dashboard called DynamiQ, this automatically sends out terms of business to the clients and temps prior to commencing any work, it’s designed to protect you and your agency.
7. Cutting Costs:
We all know that you need to live within your means, the same applies to your business. Make sure that your business has the means to work efficiently. If it would be desirable then purchase it when you have funds available.
Utilising a factoring facility is key to the recruitment industry, it enables you to get paid upfront and release money early, therefore having a positive and dramatic impact on your cash flow. There are many providers of finance out there who are not flexible enough for an ambitious recruitment agency, let alone having the sector specific skills and capabilities to run a weekly payroll for you. Quba has a 100% finance product that pays you your profit in full weekly, enabling you to grow your business far earlier.
Interested in services to support your business cash flow? Why not schedule a call with the team at Quba Solutions to discuss your required services, or fill in a contact form online.