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FREQUENTLY ASKED QUESTIONS
HOW DOES FACTORING WORK?
Invoice factoring is when a business sells its outstanding accounts receivable to a third party exchange for immediate liquid capital, less a fee.
WHY WOULD A STAFFING COMPANY USE INVOICE FACTORING?
Invoice factoring is designed specifically for businesses like staffing because of the unique payment structure. In staffing, you often have to wait 30-90 days for payment from your clients, while you pay your staff weekly. This can cause a cash flow nightmare, and be limiting to your growth. Invoice factoring gives you the cash necessary to grow without having to worry about making payroll.
IS THERE A DIFFERENCE BETWEEN INVOICE FACTORING AND PAYROLL FUNDING?
No difference. Payroll funding is the term we use when talking about invoice factoring specifically for the staffing industry.
HOW MUCH DOES FACTORING COST?
The cost of factoring is variable and depends on many factors – the amount of your receivables, stability of your business, the size of each invoice, etc. To get a true estimate of the cost for your individual business, contact an Advance rep today for a free consultation.
WHAT DOES ‘FULL SERVICE’ MEAN WHEN IT COMES TO FACTORING?
Full service is an add-on service where the same third party that does your invoice factoring will also do back office tasks like creating and processing invoices, processing payroll, and doing payroll taxes.
HOW DO I START A STAFFING FIRM?
If you have good experience and the will to succeed, starting a staffing firm is a great idea. For a minimal technological investment, you can run a staffing agency almost anywhere. We have several resources on how to start and maintain a staffing firm that you might be interested in:
- Startup Resources
- How to Start a Temporary Staffing Agency
- 9 Common Pitfalls Your Staffing Startup Should Avoid