Keeping the financial status of your agency healthy is so important for the future of your new business, however it can be one of the most challenging aspects.
Imagine you have an exciting chance for growth and you need a business loan, you want to be in the best position you can to take advantage of the opportunity.
Below we’ve taken a look at a number of different ways you can boost the financial status of your recruitment agency:
Ensure Customers Pay On Time
A great way to keep your recruitment agency’s financial status healthy is by ensuring that your customers pay on time.
You might feel it’s out of your control, however there’s a number of different strategies you can implement to get your customers to pay faster.
For example, as soon as you start working together make your terms and conditions completely clear around payment.
Also make it easy to pay by ensuring your invoices are clear and accurate, considering a potential incentive for early payment!
Check You’re Working Efficiently
By taking a look at the processes within your recruitment agency you’re able to determine whether you’re working as effectively as you could be.
You might not see this as directly linked to your finances, however you can lose serious amounts of money by not working efficiently.
Even little things like reviewing your energy bills can be a great way to cut costs and save your recruitment agency money.
Maybe outsourcing your back office functions might free up your time enough to help bring in extra business?
Keeping costs low is a piece of advice we always offer new agencies, however the advice really applies to businesses at all levels.
Taking a close look at your business costs can sometimes be eye-opening, as due to the nature of service subscriptions, you might find yourself still paying for things you no longer use.
Review each cost you incur each month and decide whether it can be removed or if you could find a more affordable alternative.
Use an Accounting Service
Though one way to save costs is by doing your accounting work yourself, it can be extremely time-consuming.
Not only that but the slightest error, or delay in payment, could mean you end up paying more than you ever bargained for.
Here at New Millennia we offer an accountancy service specially designed for recruitment agencies.
You could choose a standard package, including a range of services, such as the preparation of financial statements and your self-assessment return, or opt for a bespoke package designed around your needs.
Keep it Strictly Business
Whether you decide to use the services of an accounting company or do everything yourself, it’s essential that you keep your business and personal finances separate.
When working as a sole trader operating your own recruitment agency, it can be tempting to just use your own personal account for business transactions.
However this can quickly get complicated, and prove to be much harder to keep an eye on exactly what is coming in and going out each month.
Increase Your Fees
Increasing your fees is always difficult when you’re just starting out, but when you’ve become established it’s something you can definitely consider.
As long as you can prove your value and why you deserve a higher fee, many clients will at least be open to considering the increase.
Choosing the right timing is of course so important, however if you hit that sweet spot you can see a financial boost for your recruitment agency.
Look at Your Cash Flow
Having cash flowing smoothly into your business, will give you the confidence you need to keep going even if you suddenly find yourself without a fee that you expected.
There are a number of different strategies you can implement to improve cashflow within your business.
These include offering an incentive for early payment and enforcing late fees for those payments that never arrive on time.
Keep a Close Eye on the Bigger Picture
Ensure you always know the financial status of your recruitment agency, so nothing comes as a surprise.
You should have a set target for each month and then a yearly target to help you stay on track.
Assessing where you are against your yearly target each month, enables you not to lose faith when you have a less successful month than you’d initially hoped for.
It also means that when financial downturns inevitably happen, due to either external or internal factors, you’re able to react quickly and protect your business.
Consider Recruitment Finance
Recruitment finance can be one way to boost the financial state of your recruitment agency.
If you’re supplying temporary staff to a company, then recruitment financing provides the funding to pay your temps and yourself, before you’ve received payment from your client.
At New Millennia we’ll then collect invoices directly from your client so there’s no waiting and no hassle.
With your own bespoke portal for temps to upload their timesheets and a specialist team handling all the back office functions, it can improve many of your business processes.
There are no minimum fees or set up costs, plus no personal guarantees are required, making it a low risk way to boost the financial status of your recruitment agency.