Why having strong cash-flow is fundamental to your business

Many recruitment businesses fail not because their business plan isn’t sound or their consultants aren’t good enough at bringing in the work, but because they fail to effectively regulate cash flow. Managing your cash resources and ensuring you have enough to meet your outgoings, such as paying wages, rent and any personal financial requirements, is absolutely critical.

Recruitment agencies, especially those that operate in the temporary recruitment arena must have a firm understanding of their cash flow, otherwise they will be unable to trade in a relatively short period of time. In a normal start up business, wages, rent and bills will account for the majority of outgoings meaning there must be enough income to cover these month-on-month.

Agencies that place temporary workers can be a victim of their own success very early on without financial planning or working with the right recruitment funding partner.  With invoices typically being paid 6-7 weeks after the agency has had to pay the temporary worker, the impact this can have on cash flow can be catastrophic. As a result a firm may not be able to pay staff, expenses, could lose growth opportunities and even face bankruptcy.

Therefore, it pays and goes a long way to partner with a specialist funding provider for invoice finance. The financer can release the cash tied up in every recruitment invoice the moment it is issued, rather than waiting for recruitment invoices to be settled by the client.  Quba Solutions raises the invoice to a client the same time as paying the worker. Therefore, rather than waiting 6-7 weeks for payment you’ll receive 100% of your profit that same week. Invoices are then collected by the Quba, meaning zero delays and no effort wasted on time-consuming administrative duties.

Improved cash flow, flexibility, no chasing debtors, no late payments and complete scalability are just a few of the benefits specialist recruitment invoicing services provide for recruitment agencies requiring funding to help assist their growth.

If you’re interested in learning more about how Quba can help your business, please feel free to call our expert team any time on 01305 233178.