How can recruitment companies reduce their risk of late payments?
Late payment and poor payment practices continue to be an enormous burden on UK businesses, with an astounding £26.3 billion owed to SMEs in late payments, per Bacs research.
For the recruitment industry, particularly recruiters that deal with temporary placements, it is essential that cash flow is maintained; late or non-payment can have a significant impact on the cash flow of a business which can result in additional costs in extending finance arrangements if that is possible, and in severe cases even insolvency of the recruitment business.
There will always be an element of risk to late payment when businesses provide credit to their customers, however there are ways to reduce this risk.
Carrying out due diligence on current and prospective customers can help in identifying those customers that pose more risk to your business. Credit risk reporting can highlight anything untoward with regards to a company’s credit risk, for example any CCJs. However, you should be aware that this is only a company’s credit risk at one point in time, to be kept informed of any changes you should also place customers on credit risk monitoring.
Robust credit management procedures
Credit management is an essential aspect to your business, and you should ensure that it is working effectively for your business. Good credit management will incorporate the entire order to cash process, including T&Cs, invoicing procedures, collections etc.
How we can help
Our aim is to provide services that enhance a business’ credit management function so that it works effectively for them, our services include:
Outsourcing – We have a considerable amount of experience in carrying out our outsourced collections for recruitment companies, dealing in both temporary and permanent placements. We become the virtual credit control department for a company; chasing for payment in our client’s name, improving collection performance and reducing their debtor days significantly.
Support – Our low cost support service provides telephone and email advice, credit risk reporting and monitoring, as well as access to our online toolkit.