Healthcare Staffing Academy

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Choosing the Proper Funding company for your business

Published by on September 8, 2022 | Leave a response

Staffing factoring, also known as invoice factoring or invoice financing, payroll funding allows you to sell your accounts receivable for cash to meet payroll for 1099 employees, independent contractors, and other staff. Payroll financing is designed to help your staffing company make payroll before you are paid by your customers.

 There are twists and turns in your business cycle, and that your cash flow needs can increase or decrease from month to month. Like it or not, staffing is a negative cash cycle business. Have you ever found yourself in a position where a big business opportunity strikes, but you cannot afford payroll for the temporary workers it would take to complete it? A staffing firm looking to grow should never have to be in a position to turn away big projects when they arise, because that means turning away revenue. 

Finding and placing high quality temporary workers who want to work is one of the greatest challenges of your business. But with major talent shortages occurring and expected over many industries. Temporary Staffing as a whole is growing and there is a big pipeline for staffing firms to help fill, especially in healthcare.

Because of the difficulty involved with finding and keeping temporary workers, any barrier could be costing you big. If your current funding source does not give you the flexibility to hire all the help you need, that is money down the drain. It is also important not to lose the good ones you do have by not being able to pay them on time when you are waiting for outstanding invoices. Once you are known for not paying your employee it is difficult to recover from. Word of mouth advertising from staff to staff is free however expensive depending on your reputation.

So, the further you grow, the more money you will need. The Southern Bank Company makes sure business owners like you have access to the funds and working capital you need to pay your temporary employees on time, without strict limits and restrictions.

Funding companies are created for the following, improve your cash flow, get unlimited access to funds at competitive rates. Also, to advance rates of 80 to 90% upfront this should remain hassle free process. 

Your bank credit line   will cover it and you will receive 80-90% of your accounts receivable or invoice funding within days of submission. What I have learned through trial and error is some fly by night funder’s do not have the resources to help you with the extra back-office support it would take to accomplish it. They tend not to have the reputation of a banking service. Not to mention they will take a higher percentage of your overall revenue. The Funding companies will sell you on security of providing back -off support, onboarding, and workers’ compensation insurance. All of this sounds great; however, you are placing your company’s future in someone else hands. One wrong or missed payroll run can and has collapsed many businesses. As healthcare staffing becomes recession proof lucrative business. You will see more Funding companies developed. It is tempting to believe that funding fraud is something that happens to other businesses, not your own. By putting a few safeguards in place, you will be able to make your company a less appealing target. It is important to research the company record. Call the company not as a new customer but as an existing company, keep a record of your hold time. They will work hard to gain your business however not available to assist you with solutions to your problems. Some Funding companies offering back-office support are known to outsource the back-office task to a third party. This can present a new series of issues and all you needed was the funding. Funding companies also borrow money from banks to fiancé their company, so why not cut out the go-between. You can receive a credit line through The Southern Bank Company and still maintain control of your business. As you grow so does your credit line. 

 

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How to Price Your Staffing Services

How to Price Your Staffing Services

Published by on September 8, 2022 | Leave a response

Owning a staffing firm can be profitable, but only if you know how to bill your customers. Striking the right balance is key and a big challenge for this competitive industry margin.

 Charge too much; you might lose contracts to your competitors. Too little, and you are undervaluing your services and cutting into your profit 

Whether you have been in the business for decades or just starting up, it is not always clear what you should be charging customers to keep competitive and still make a profit.

When overcharging your customers is present, you will have to convince them that your company is the best solution for their staffing shortage. You will have to work harder to gain that contract. If you are slightly overcharging however providing the best care, they will tend to overlook the increase of cost for the expertise your staffing agency offers. There are hundreds of staffing agency; What makes your agency better than the lower bidding companies? How do you stand out among your competitors? Always be open to negotiation however consider the value of your employees. 

An under bid can be more harmful to your staffing agency than overbidding. You must consider what goes into your staffing bids. Many different distinct factors go in to pricing out your staffing firm services, below is a list of components to help you determine a fair rate to charge your clients while keeping your business generating profit.

When starting a firm, we think there are four key things you must consider:

  • Employee
  • Specialty (Niche)
  • Insurance
  • Payroll Funding

The people you hire are by far your most important asset. To remain competitive and get quality staff your payrate must have value to the employee. To accomplish the first task, your bid rates must be adequate, under billing will devalue your employees. Have you ever heard the old saying. you will get what you pay for? This is true with staffing low bids means you pay your employees less for their services. Also, if a business is paying out more in expensive than they are generating revenue, your company does not sustain a market adjustment. You will find yourself in bankruptcy.

 Understanding your niche is critical. Your Niche is your special service you provide your client. This is how you will convince your client that are the best solution for their company. You can build on to your niche, however, make it clear exactly what you are offering. 

For a new firm, you will need various insurance policies, such as Worker’s Compensation. Workers’ Compensation is usually expensive for new start up staffing agencies. And may cause many business owners to decide not to go into business. Although this is difficulty to obtain but it is not impossible. You do have options and depending on your niche will assist the workers compensation company to determine your how it will cost. Beware of Workmen Compensation companies price gouging. It is important to research the insurance companies as well. You must do your due diligence to assure you are setting your company up for longevity and success. There are options for startup companies in spite the market will challenge you. 

 

Finally, you will have to secure the appropriate working capital. Startup temporary staffing businesses have significant and immediate cash flow needs. It is up to you to figure out which financing option works best for your goals. Most companies are offering daily and weekly pay. You must understand your employees and company’s needs. There are a few evidence base funding lenders recommend by multi- million-dollar staffing agencies.

Click the link below to find more secrets to how to price your staffing agency

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How to overcome slow-paying clients

How to overcome slow-paying clients

Published by on September 8, 2022 | Leave a response

One key way to make sure customers pay you on time is to set out clear payment terms in your staffing agreement. Many small business owners fail to include a due date or any other kind of terms. Please do not wait until you invoice a customer to introduce terms. In fact, it is recommended that you spell them out earlier in your staffing agreement. You do not have to set your terms at 30 days either, you can ask for whichever payment terms work best for your company. Most hospitals will request a 90-day payment plan. However, it is your choice on how you want to conduct business.

One way to overcome slow-paying clients is to request payment terms that demand a portion of your fee upfront. Rather than wait for full payment weeks after the work’s complete, it is perfectly reasonable to ask for 30%, or even 50% of the final fee, before work begins. Many customers will expect you to ask for this. If you are a small business, it is your guarantee that they are fully committed to the project and offer them the security that you are serious about undertaking the work. However, with a Staffing agency, services must be rendered before payment. 

These days you can skip the paper checks and use one of the many online payment systems available. For example, it can reduce the time it takes to get paid by up to 47%. By using an ACH depositing system. Your DSO (days sales outstanding or aging report) could be drastically reduced, and you could even get paid up to weeks faster or more, with an average reduction in DSO from 4.5 to 2.4 days. When you are setting your payment terms, make sure customers know what will happen if they do not pay on time. Once you have sent out your invoice (on time) send out reminders to let customers know the payment is due soon. It is recommended 5 to 10 days prior to the invoice becoming due. Keep track and pay close attention to the facilities that do not meet their due date. In the staffing industry, you do not want to continue to pour staff into a facility that does not pay their invoices on time. 

If you do all the above and customers still are not paying you on time, then draw the line. There is no reason to continue doing business with these types of clients. It is obvious that the client may have internal issues such as poor management, high HR turnover, or poor bookkeeping. As a vendor providing a service, it is ok to have an empathetic outlook for the shortage, however, never jeopardize your business. 

It is imperative to set a standard of expectations during the agreement phase as a business owner who has learned through trial and error. Always remain professional and in charge of invoicing. Do not hesitate to contact the facility on day ten before the invoice deadline and day thirty-one as a reminder that the invoice is now past due. If you have chosen to request late fees after 30 days, do not hesitate to implement late fees. Remember that the value of your employee is at stake. Also, if you are financing your payroll, you are accumulating additional fees daily after 30 days of past due payment.

Your business decisions in this area can hinder your ability to grow. You are also losing revenue because now you are paying out more to funding companies for late invoices. A funding company can charge between 2-25% of the invoice depending on when invoices are paid.

Lastly, there is a sure way to overcome slow-paying clients. To connect with a business coach who can direct you to insurance companies that will insure your invoices. Please use caution with your selecting the right coach to assist you with protecting your revenue.

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