Money makes the world go round, as the saying goes – and it’s certainly true in the business world. When it comes to launching and developing your own recruitment agency, cash flow is king.
Yet despite its importance, many companies struggle to manage revenue streams as effectively as they’d like. A WePay study has found that 41% of businesses experience cash flow challenges, and 6 in 10 say it has major consequences for their financial stability.
Rather than accept the challenges of building business revenue, however, technology leaders are looking at ways to manage critical issues like cash flow more effectively. New daily payment platforms are on the horizon that could prove a gamechanger for the way your recruitment agency manages revenue – and here’s why.
The pain of late payments in recruitment
Cash flow is crucial to any business, but in a heavily supplier-based industry like recruitment it’s even more important. Your entire business model is based around securing contractors for specific services – and those contractors need wages regardless of whether you’ve been paid.
The problem most recruitment agencies face is that current invoicing methods don’t promote prompt payment. In order to bill clients, you need accurate data on staff hours worked that week or month, and any expenses accrued during that period. All too often this information is submitted late or incorrectly by contractors, leaving your team scrabbling around to get paperwork collated and formatted for invoicing.
Even when your invoice goes over there can still be delays in the process, should your client have any queries or issues with the details submitted. And because many companies have a set period each month for processing payments, missing that window can mean a whole month goes by before your invoice is settled.
All in a day’s work
Given these everyday obstacles, it’s easy to see why financial matters play heavily on many recruitment bosses’ minds. Thankfully, new technology is addressing the cash flow challenge – and could potentially put an end to painful 30-day payment terms.
Recruitment tech experts are exploring the opportunities offered by new security mechanisms such as the blockchain, which enable two parties to make immutable transactions in real-time, without the need for physical paperwork or third-party involvement.
In real-word terms, this means payments can be made and funds accessed instantly, so recruitment agencies can easily work towards a scenario where your contractor hours are logged, invoiced and settled on a daily basis.
Boosting your business and your contractors
The impact of introducing daily payment capabilities could be huge for recruiters. In addition to boosting business cash flow, there is the added benefit of being able to pay contractors on a more regular basis.
By seeing the fruits of their labour quickly, your temporary and contract workforce will get an immediate financial and emotional lift – helping them to stay motivated and keep delivering great work for your clients.
Additionally, the combination of fewer admin worries and greater access to cash will provide your business with the resources needed to keep growing and innovating, while your team can concentrate on building even more valuable client/contractor relationships.
Embracing the emerging world of daily payments
Life seems to get quicker every day, so it makes sense that invoice payments are set to speed up. By embracing emerging technologies that enable real-time transactions, recruitment agencies will be able to reap the benefits of daily settlement – and stop cash flow concerns keeping you awake at night.
Not only that, the all-too-common delay between paying contractors and being compensated for their time will be eradicated. In this way, daily payments offer a ‘best of all worlds’ operational model for everyone that you’re dealing with.
To learn more about the daily payments opportunity and other key industry trends, download our whitepaper on The Future of Recruitment.