Firms of all sizes and in all stages of their life cycle can receive accounts receivable factoring, whether you are just starting a temp agency or established in the field, and whether you have five clients or 50.

Funding is available for firms in any staffing industry, whether it is light industrial, administrative, IT, construction, health care, legal or clerical. Many firms also provide factoring to companies outside the staffing industry, as well.

Factoring aids your staffing firm by providing quick and easy cash to fund your business in an industry in which companies often suffer from cash flow gaps.

There are typically eight easy steps to receive accounts receivable factoring.

1. Contact your factor’s sales department.
2. Your sales representative will collect information about your staffing business.
3. Complete a credit application form and provide client information.
4. Your factor performs a credit check on you and your business.
5. Your factor approves your credit.
6. Your factor meets with you to discuss rates, terms and conditions.
7. Your factor collects additional information as needed.
8. Your factor provides you with a draft contract that includes terms, conditions and rates.

For information on TemPay and our payroll factoring services, contact www.tempay.com or (866) 683-6729.

What type of businesses do you factor?

TemPay’s main clientele is temporary staffing firms in any industry, including light industrial, administrative, information technology, construction, health care, legal, clerical and many others.

We also provide factoring services to businesses that regularly invoice creditworthy commercial customers.

We’ve factored companies in the staffing, IT, software, advertising, security services, auto, manufacturing and transportation industries. 

What size clients does TemPay service?

Firms of all sizes and in all stages can receive payroll funding, whether you are just starting a temp agency or established in the field, whether you have five clients or 50.

Are there any restrictions on a client’s location?

No. TemPay serves clients throughout the United States.

Are there restrictions on the location of a client’s customers?

No. Your clients can be anywhere in the United States.

There are two different types of factoring.

• Recourse – With recourse, the staffing firm assumes the risk and losses for unpaid invoices. As a result, the staffing firm must buy back invoices that their customers don’t pay in a fixed amount of time.
• Nonrecourse – With nonrecourse, the factor assumes the risk of bad debt and is out the money that it is unable to collect. This is safer for the staffing agency but riskier for the factor. This method is often used in 80/20 rule situations, in which 80 percent of your business comes from 20 percent of your clients, and if they failed to pay, your business would suffer greatly.

TemPay provides the former, recourse funding. Most factors provide this type of funding because it carries less risk. If a factor does offer nonrecourse funding, it typically comes with a significant fee.

For information on TemPay and its payroll factoring services, contact www.tempay.com or (866) 683-6729.

Brian is senior vice president of credit relations, responsible for the credit and collections department and maintaining client relationships. He has more than 30 years’ experience in credit risk management.

TemPay is very pleased to have Brian rejoin the company.

Staffing Industry Analysts reports staffing revenue in 2013 is expected to hit nearly $135 billion, exceeding prerecession revenue levels.

Whether you’re starting a staffing agency or have been in business for a while, your company has the potential to grow monumentally in the next few years, and factoring — a form of payroll funding in which temp agencies sell their accounts receivables for a fee to obtain cash — can help accelerate that growth.

Increased cash flow

When you engage in payroll funding, you don’t have to worry about whether you’ll have the money to fund your payroll each week. That frees up your finances, which you can then invest in growing your business by hiring more employees, expanding your current location or opening a new location.

Flexible lending

Payroll factors understand that your temporary employees are often paid weekly, while your clients don’t pay for 30, 45 or even 60 days, creating a payroll funding gap. So if you need additional funding to cover your workers’ compensation costs or office lease payments one month, or a larger-than-usual advance to open a new location, they understand your business and will help you meet your goals.

Full service

Full-service payroll funding allows your factor to provide back-office administrative services such as filing payroll taxes, sending invoices and collections. Outsourcing these services frees up time for you to focus on other aspects of your business that will help it grow, such as meeting with clients or interviewing new temporary employees. With less time spent in front of a computer doing mundane tasks and more time spent strategizing and networking, your business will continue to grow and thrive.

For information on how TemPay can help your staffing firm grow, contact www.tempay.com or (866) 683-6729.

Today’s temp workers aren’t your grandparents’ temp workers.

The industry initially took off in the United States post-World War II, employing housewives in part-time clerical positions or to fill in for permanent employees on vacation or sick leave.

However, that is no longer the case. Staffing agencies employ temp workers of all ages, races and sexes in a vast array of industries, with about 13 million people working as temporary or contract employees each year, according to the American Staffing Association.

Here are four ways temporary workers today differ from temporary workers in days past.

1. Temp workers aren’t just laborers or secretaries anymore. There are any number of industries that supply temp workers, including:

There are several downsides to bank payroll funding.

• It takes time. Banks will verify all of your information before issuing any financing. The application process is long, and you’ll need to provide a great deal of information. There are also many prerequisites that businesses need to qualify for a loan, such as a good credit history and proof of a stable income source.

• You risk losing your collateral. Because your commodity is people, you do not have traditional collateral. As a result, to obtain payroll funding from a bank, you’ll need to put up your personal property, such as your home or car title, as collateral. In the event that your business fails and you cannot pay back the loan, you may lose this property to the bank.

• You may not receive the amount requested. Banks may only give you a portion of the money you’ve requested. This means you’ll either need another source for additional funding or you’ll have to decrease your budget. And if you use all of your loan amount or line of credit and need additional funds in a pinch, the bank may not give them to you.

• Interest rates and fees are typically higher. This often slows the growth of your business because not only do you have to pay the amount back, but you also have to pay interest. In addition, if you receive a loan but don’t use all the money, you’re still paying interest on the full amount, and there may be hidden fees attached to the loan.

For information on how TemPay can provide payroll funding for staffing companies, contact www.tempay.com or (866) 683-6729.

So how do you decide which firm is right for you?

• Seek advice from your peers. Ask others in the industry for staffing funding company referrals, and if you have a specific factor in mind, ask if another firm has used it and how the experience was. This allows you to narrow your prospect list and save valuable time.  

• Ask the hard questions. Having stable cash flow is critical for your business, so make sure your potential factor has a stable source of cash. While you won’t be able to delve into the company’s finances, you can ask how you can be assured your company will be able to receive its funds.

• Determine what type of funding you want. Are you looking for a traditional banking solution, such as a loan or line of credit? Or have you considered factoring, in which staffing companies sell their accounts receivable for a fee to a third party to obtain cash? No matter which form of payroll funding for staffing companies you choose, there are pros and cons to each. For example, with traditional financing, you often retain control of your accounts receivable, while with factoring, the factor often gains control.

• Select a firm that specializes in the staffing industry. Factors that specialize in staffing firms will better understand how your business operates and what its unique needs are. This is critical in situations in which temporary employees are often paid weekly but clients don’t pay for 30, 45 or 60 days, creating a cash flow gap.

• Review your options annually. Even if you think you are currently receiving a great deal, it is wise to review your payroll funding for staffing companies options each year. Both banks and factors often offer aggressive rates to gain new business, and if you find a better deal than the one you currently have, you can let your factor know. Most often, it will beat the competing price to keep you as a client.

For information on how TemPay can provide payroll funding for staffing companies, contact www.tempay.com or (866) 683-6729.

“Staffing sales is more about education rather than just selling,” says C. Adam Forbes, president of BaronHR. “You need someone who can educate your clients on the services you have and how they can help their business, while also educating them on the potential risks and consequences of handling employment on their own.”

Evaluate sales skills

There are several skills you should look for in your staffing firm sales staff.

First, look for someone who is self-motivated and who has excellent people skills and strong adaptability, Forbes says.

“One day you’re speaking to a manufacturing plant manager, the next day you’re talking to a CEO looking for administrative help,” he says. “Temporary sales staff needs to be able to talk shop with mechanically minded people but also have the professionalism to speak to upper management. We cater to many different industries, so they also need to have a working knowledge of these industries to present our services in a way that is applicable to our potential clients.”

Look for staffing experience

Ideally, hire those with experience in the industry, Forbes says.

“Historically, the percentage of people who are a good fit and successful are those who come with staffing experience,” he says. “There are a lot of moving parts in the staffing industry, and if they don’t have the knowledge, it can be hard to sell.”

If they don’t have experience in staffing sales, experience in some aspect of a staffing firm’s business operations is preferred because they will understand how the industry operates. These could be people who have worked in workers’ compensation, human resources or temp payroll services.

Focus on retention

One of the best ways to retain your sales staff is to take care of their clients, which not only builds the reputation of your company but also the reputations of the sales representative, Forbes says.

Another way is to be a good listener and provide support whenever needed.

“Sales staff members need to be able to voice their opinions, and you need to understand their challenges and listen to what they are,” Forbes says. “Everyone wants support and structure to know they are given every possible opportunity to be successful.”

Recognition programs are also excellent retention tools. Consider recognizing your sales staff in company newsletters and at awards dinners, and personally congratulate them on good sales weeks.

A good compensation plan is also key. The best commission structures both incentivize the sales representatives and bring in new business.

“Reward your sales reps for bringing on new clients with a bonus and then with a residual commission based on the profitability of the account,” he says. “This encourages them to bring on profitable and healthy accounts because they benefit them long term. After a year, the commission should drop to encourage them to bring in new business. They can’t have just one big account that they’re living off for the rest of their life.”

Here are our top seven phone etiquette tips for speaking with your staffing firm clients via the phone.

1.    Call at an appropriate time. This is generally accepted as between 8 a.m. and 9 p.m., unless you’ve received a request for an outside time. Be aware of different time zones so you don’t call too early or too late. Also, ask clients the best time to call them to avoid playing phone tag.

2.    Be polite. While this may seem like a no-brainer, it is surprising how many people fall into a pattern of rude behaviors, thinking they don’t matter or the client won’t notice. Answer the phone with a polite greeting, such as “Good morning. This is Joe at ABC Staffing Service. How may I help you?” as opposed to just “Hello” or “This is Joe.” Do not eat, drink or chew gum while on the phone. Never swear or use slang. And always end with a pleasantry, such as “Have a nice day.”

3.    Deal with angry callers calmly. Whether you are starting your own staffing agency or have been in the industry for years, you are bound to receive an angry call or two. Listen to the caller’s problem and ask for specific details. Allow him or her to vent, and empathize with the concern. Always apologize for any inconvenience. Present several solutions and let the person choose an option. Ask if the caller is satisfied and if there’s anything else you can do before hanging up. And if you make a promise to do something, do it immediately.

4.    Ask if you can put the caller on hold. If you need to transfer a call, speak to another member of your team or look up information, ask if you can put callers on hold rather than telling them. Take care of the task quickly; if the phone rings back to your desk, the caller has been on hold too long. When coming back to the phone, thank the caller for waiting.

5.    Return calls as soon as possible. Whether it is a message left on your voicemail or a verbal promise, return calls promptly. Whether the client needs immediate staffing, has a problem with a temp employee or asks a billing question, the concern is immediate and affects the caller’s. Quickly returning clients’ calls tells them how quickly you will handle their business in the future and how much you value them.

6.    Avoid distractions. Do not check your email, surf the Internet, text or play games on your cell phone, or update your social media while on the phone. Only speak to associates during a call if it is necessary. If you do need to speak to someone, ask if the caller can be put on hold, and make the conversation brief.

7.    Create an appropriate voicemail greeting. Greetings that include jokes or that are too long are inappropriate. A short, direct message is preferred: “Hello. You have reached Carol at XYZ Staffing Service. Unfortunately, I cannot take your call right now, but if you leave me a message with your name and phone number, I will return your call as soon as possible. Thank you.”