If your recruitment agency works within the contract market, then debt is inevitable but it’s how you and your funder manage that debt that will make all the difference to your business and its future. Here are a few of our key factors that we feel are essential to reduce exposure to debt.
VISIBILITY OF DEBT
Having visibility of your debt and the age of your debt is the first step to minimise risk. Growing your business is exciting but if you’re continually placing contractors, paying those contractors weekly/monthly and not being able to see when those clients are paying it can increase your exposure massively. Partnering with a financier that can provide this visibility will safeguard your business from running into bad debts.
Quba’s online dashboard DynamiQ will provide full visibility of your debt both in the form of a total debt balance and a full aged debt report, showing the age of the debt in current, 30, 60 and 90 days. Alongside this our dashboard will also provide you with visibility on your clients and their credit limits alongside how much of the credit limit you have in use. This information is updated by your credit controller daily so will always be up to date for your reference. With this information so readily available it gives you the ability to be able to make informed business decisions, reducing the likelihood of you
Controlling your aged debt and having your invoices paid promptly is another key factor to ensuring your debt doesn’t spiral out of control. Having an experienced credit controller to manage the credit control process on your behalf is crucial. Quba provide all agency partners with an experienced and dedicated credit controller who will contact your clients from the very beginning to create longstanding relationships.
Having a back-office provider who understands recruitment and can be flexible to your requirements is also key to ensuring client satisfaction we don’t send out threatening or automated emails immediately and will always consult with you, the business owner, first.
This will essentially insure any of your outstanding invoices in the instance that a client was to fall into administration prior to having paid your invoices. Essentially providing you with a safeguard against worst case scenarios and minimising the cost to you, the agency. The debt will be insured up to the value of the agreed credit limit and as long as you are trading within the agreed limits and within terms then the only exposure to you will be the excess on the insurance, 10% or £1,000, whichever is the greater amount. Quba provide comprehensive debt protection within the cost of the solution.
It’s all well and good arming your business with debt protection, credit control and visibility on your debt but what about the company providing you with the finance? With many established companies struggling in the current climate it’s always worthwhile running a background check prior to signing an agreement and running up debt with a financier. If your funder were to go into administration then you would have to find a new financier within a week that would be able to purchase your debt and also provide credit limits for all of your clients a mammoth task to undertake in that timeframe. Not only that but you run the risk of paying an increased fee to the financier and causing disruption to your clients too.
Having an established and stable financier will again reduce your exposure to bad debt. Check a potential financier’s accounts online at companies house to put your mind at ease about the working relationship you’ll be getting into.
If you’d be interested in discussing how Quba can assist your business and reduce your debt exposure, please feel free to get in touch with us on 01305 233178.