When it comes to alternative financing methods, invoice funding is an excellent option for allied health staffing companies. Selling their outstanding invoices to a funding company provides the necessary capital for allied health staffing agencies to grow and compete in the marketplace. With that said, there are many funding companies who are able to factor allied health staffing invoices, so choosing one may seem like a daunting task. But it doesn’t have to be that way. There are five simple comparison categories to consider when choosing an allied health staffing funding company, namely: Pricing, Industry Expertise, Flexibility, Customer Service, and Stability.
The number one thing that most allied health staffing agency owners are most concerned with when it comes to choosing an invoice funding company is price.
Price can be broken down into two pieces: (1) The basic factoring fee, which is usually pretty straightforward; however, the more important pricing piece to understand is (2) All the little extra fees that many invoice funding firms add into their factoring contract. Calculating all of those can dramatically change the cost of factoring. Examples of those “little fees that add up” include: An initiation fee, a due diligence fee, a late invoice fee, a misdirected funds fee, an application fee, etc. It’s important for agency owners to fully understand each and every one of those fees before signing an allied health funding contract.
Two: Industry Expertise
The next item business owners should consider when choosing an allied health factoring company is how much experience the funder has in the allied health staffing industry. Agency owners truly benefit more when they work with a factor who understands the “ins and outs” of the allied health staffing industry.
For example, an account management team that is well-versed in the allied health staffing industry will be able to process your invoices faster, which will allow you to get your money quicker. Additionally, a funding company that understands the allied health staffing business will have a much better relationship with your customers. Moreover, you will never have to educate the account management team about what your company does because they are already familiar with specific intricacies of the allied health staffing industry. Finally, because of their industry expertise, they will already know how to interact professionally with your clients.
Some allied health account receivable factors are going to require a very rigid agreement with a fixed term, minimum transaction amounts and some sort of a penalty fee if you try to break the contract early. Others factors are going to give you levels of flexibility that will allow you to factor for as long or short as you want, factor as little or as much you want, and factor whatever clients’ invoices you want whenever you want. Given the cyclical nature of temporary staffing industry, it’s probably in your best interest to work with an invoice funding company that is more flexible with its terms.
Four: Customer Service
Allied health staffing agency owners should have a general understanding of the level of customer service that a prospective factor offers its clients. Don’t be afraid to ask allied health funding companies for references and take the time to do those reference checks. Specifically, ask for a few clients: an old and a new one, and ask for two to three total references. Then make the calls, and ask how those clients are being treated. Then ask the clients how their customers are treated. Ask about what happens when it’s time to make collections calls. Doing reference checks will help you gain comfort that the funding company will act professionally and efficiently.
In difficult economic times, allied health staffing business owners want to work with a factor that has been around for a while, has a long track-record of successful allied health factoring relationships, and has a balance sheet that can support you and your company’s prospective growth. This way, you won’t have to worry about whether your funder is going to close up shop when you’re in the middle of a profitable growth spurt.
Remember that allied health staffing agency owners can benefit greatly by selling their outstanding invoices to a factor. All you need to do is keep these five comparison categories in mind when researching potential allied health staffing funders, and you can’t go wrong.