Services Provided by Payroll or Temporary Staffing Factoring Companies
In previous posts, I’ve written about the benefits of payroll or temporary staffing factoring. Now, let’s go over some of the details of the funding process and the additional services to consider when working with a payroll factoring company. Obviously, pricing and rates are of primary importance, and you need to make sure you’re getting your money’s worth when it comes to choosing a factoring service. Here are some key variables to examine closely.
Fast Funding– You want to work with a payroll factoring company that provides same-day or next-day funding. Usually this is done by wire or ACH soon after you give them your invoices and time cards.
Advance Rate– Find out what percentage of your invoice is advanced and what percentage is held in reserve. Advance rates can range from 80% to over 95%.
No Minimums– No required minimums means you can factor on an as-needed basis and save money. In some cases, a long-term contract or a specific on going dollar volume may make sense, but make sure you have a good reason, like cost-savings for making the commitment.
Credit Protection– Some, but not all factoring companies offer credit protection. Credit protection, also known as non-recourse factoring, protects you if your customer goes bankrupt or does not pay the invoice. You will likely pay a little more for this type of factoring. In contrast, without credit protection, any uncollected invoices are charged back to you.
Credit Analysis– Many factors can provide you credit checks for new customers and advise you on the likelihood of receiving timely payments from them.
Full Account Management Services– Beyond purchasing your invoices, factors offer account management services, including personalized account specialist or account teams, payroll reporting, payroll checks, invoicing and invoice mailing. Some factors even provide payroll and payroll tax administrative services, 940/941 filings and year-end W-2s for employees.
Online Reporting– To stay up-to-date on your invoice payments, you can use a factoring service that provides 24/7-access to daily invoice reporting via the Internet. This provides you the most efficient means for keeping up with the payments. It also helps you track the accuracy of the payments.
If you do an Internet search, you’ll quickly realize that finding the right staffing factor can become a complex decision. How can you figure out the factor with the best rates, terms and customer service? We have years of experience in the factoring industry and can help you sort through the details. We also have quality online resources, such as video blogs and other articles to educate you regarding the practice of factoring accounts receivables. Feel free to contact us anytime to discuss your funding needs or ask questions.