Do you have a profitable medical staffing agency that is sometimes short on cash? Or are you thinking of starting a medical staffing agency and worried that you won’t have enough money to make payroll? If you answered yes to either of these questions, then you are not alone. Every medical staffing agency owner goes through cash flow challenges. Some find ways to overcome their cash flow problems, and some do not. If you want to be one of the medical staffing business owners that succeed, then you should keep reading.
One of the most frustrating aspects of owning a medical staffing business is that healthcare providers oftentimes insist on extending payments beyond 45 days. In fact, it’s not uncommon for a large medical facility to cut checks 60 days or later after services have been rendered. Naturally, a consistent history of ‘staff now and get paid later’ can wreak havoc for any new or growing medical staffing company. In effect, it causes the agency to be invoice rich and cash poor, which means that a medical staffing agency has a lot of outstanding receivables and little cash in the bank to show for it.
Fortunately, there is an easy way for staffing agency owners to turn their receivables into cash – medical staffing payroll factoring. It’s is one of the most used and least talked about ways to finance a business. In essence, medical staffing payroll factoring is a financing tool that allows medical staffing agency owners to convert their invoices into cash immediately. Specifically, a medical staffing payroll factor purchases an agency’s invoices at a discount and offers an advance payment to the agency. When the invoices come due, the medical staffing payroll factor collects directly from the agency’s clients (account debtors), takes its fees and releases the balance back to the agency. Utilizing medical staffing payroll factoring can transform an invoice rich agency into a cash rich.
Still not convinced that medical staffing payroll factoring can help your agency? Here are some additional benefits of medical staffing payroll factoring:
Medical Staffing Payroll Factoring Improves Cash Flow
Medical staffing agency owners can use the immediate cash received from factoring to ensure that their daily business needs are met. This means that medical staffing companies can pay their suppliers on time, which helps maintain positive business relationships. Moreover, agency owners can use the funds from medical staffing payroll factoring to meet weekly payroll even if their clients take months to pay. Finally, medical staffing factoring gives agency owners enough upfront cash to pay quarterly payroll taxes on time, allowing them to remain in good standing with the IRS.
Medical Staffing Payroll Factoring Helps with Collections
As stated previously, healthcare providers typically take months to pay their medical staffing vendors. For this reason, many medical staffing agencies appoint a separate collections team to chase down past due payments. However, when an agency owner uses a payroll factor, he/she has constant cash flow coming into the business, and it eventually reduces the time and resources allotted for debt collection. Additionally, many medical staffing payroll factoring firms offer collections assistance as part of their factoring services. Agency owners who use those collections services worry less about money coming in and more about how to make more money by growing their companies.
Medical Staffing Payroll Factoring Secures News Clients
Having to wait to be paid puts a kink in things when an agency owner is trying to bring on new clients. Signing a big contract is difficult to do when agency owners don’t have enough cash on hand to cover recruiting and hiring expenses. The end result is that the medical staffing agency has to turn down new business because of insufficient funds. Medical staffing payroll factoring helps agency owners avoid such problems because it provides a continuous supply of capital. Medical staffing business owners can tap into that uninterrupted cash flow, and start saying ‘yes’ to new clients.
Medical staffing payroll factoring is the perfect financing option to help agencies overcome their cash flow problems. It gives agency owners the ability to stay ahead of their competition because it provides the instantaneous cash needed to balance daily financial obligations. Medical staffing payroll factoring frees up internal employees from wasting valuable time and money on the collections process, and it helps agency owners acquire new clients.