Recruitment Invoice Finance

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What is invoice finance for recruiters?

Invoice finance is a type of finance that allows businesses to release funds from their unpaid invoices.

For businesses that operate on delayed payment terms of 30 days, 60 days or even 90 days, invoice financing can improve your cashflow and allow you to grow your business.

Payment for funded invoices are usually paid within 24 hours, meaning you’ll no longer have to wait to receive the funds for completed work.

How does it work?

Invoice finance works as follows:

Invoice sent – Issue your invoice as you usually would and send a copy to your invoice finance provider. Most funders have simple platforms that allow you to login and upload in a couple of clicks.
Receive payment – Within 24 hours of your invoice being raised, you will receive up to 100% of the invoice amount, although many lenders restrict this to 90-95%.
Invoice is paid – Once the invoice is settled, you will receive the balance that is due to you, minus any fees and charges due on the finance.

The process is designed to be simple and requires very little administrative effort on your part.

Are there different types?

Yes, there are different types of invoice finance for recruiters. The main 2 are invoice factoring and invoice discounting. They work as follows:

Invoice discounting – Invoice discounting, also known as confidential invoice discounting, works in much the same way as factoring, but allows you to retain management of your own credit control. For this reason, discounting is a confidential service, and your customer will be unaware of the facility.
Invoice factoring – Invoice factoring, also known as debt factoring, offers the full service, including fast finance against your sales ledger, through to full credit control. As the lender chases your invoices on your behalf, your customer will be aware of your finance facility.

What terms can ABC Finance offer?

At ABC Finance, we work with the markets leading lenders, which means we can offer the perfect deal for you, no matter your requirements.

We can offer:

Funding for both contract and permanent placements
Funding up to 100% of your invoiced amount
Factoring or discounting
Market leading invoice finance costs
Support from an experienced expert who is on your side – not the lenders
Bad debt protection – to avoid the risks of a customer not paying their invoice

What are the advantages and disadvantages of invoice finance for recruiters?

The advantages of invoice finance are:

Improved cash flow – Recruiters often suffer from poor cashflow, especially contract recruiters as weekly payments are due to contractors and the client doesn’t pay until 30 days after month end. Invoice finance solves this problem.
Saves time and resources – When credit control is included, you can save time and resources that would otherwise be used chasing payments.
Increased ability to expand – These facilities can increase in size as you build your turnover, giving you more room to grow.
It’s a fast and simple way to borrow – It’s a very fast way to secure funds, offering payment within 24 hours of a new invoice being raised.
It is flexible – Recruitment finance is a flexible finance product that can grow as your business does and contract during your quieter times, reducing your finance costs during leaner times.

The disadvantages are:

Factoring takes away credit control – While this is a positive for some, it doesn’t work for every business. If you want to retain control of managing your sales ledger, consider a confidential invoice discounting facility instead of factoring.
It costs money – While the cost is usually low, there is still a cost, which will reduce your profit margin.

Will I be eligible?

If your recruitment business operates on delayed payment terms of 30 days to 90 days and works with reputable companies then there is a good chance that you’ll be eligible.

We can fund most recruitment businesses whether placements are predominantly contract or permanent.

We can even offer bad debt protection to cover you should a customer fail to pay their invoice when due.

What is the best way to secure invoice finance as a company in the recruitment industry?

The easiest way to find the best invoice finance deal is by using the ABC Finance invoice finance comparison tool.

Our online platform allows you to input your business details and requirements and within minutes, the market’s leading lenders will begin competing for your business.

With our platform, there’s no need to sit through countless sales pitches, instead, lenders upload their most competitive quotes based on your individual circumstances and you simply choose the best one for you.

If you’re unsure which lender is the best fit for you, our team of experts are on hand to talk you through the quotes offered and support you in making an informed choice.

From there, we’re on hand to support you through the whole process and can even compare options again on renewal to make sure you’re always getting the best possible deal.