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Recruitment Agencies:  What are the Keys to Financial Control?

Recruitment Agencies:  What are the Keys to Financial Control?

Recruitment agencies are there to serve their clients, putting their needs first.  But recruitment, as a business, can face its own issues. One of these is cash flow, and being able to ensure that the money going out is covered adequately by what should be coming in.


The Costs of Recruitment

Just as other sectors have unavoidable overheads, so recruitment companies have payments they must meet to work effectively.

“If you’re supplying temporary staff as your service, then it is these same people who rely on you to pay their wages,” states Wendy Allen, of PCS Credit Management. “Essentially your outgoings have to be met otherwise your business model collapses.”

Wendy observes how new, smaller recruitment agency start-ups can be vulnerable to cash-flow disruptions.

“You are heavily dependent on your clients paying you on time so that you can balance your books when it comes to paying for your assets,” she explains.


Preventative Credit Management

Recruitment, like other industries, such as freight, has often turned to invoice factoring as a means of raising cash.

“This sort of asset management suits many businesses, but not all,” Wendy says. “And it can leave smaller recruitment agencies feeling over-exposed.”


“Sound credit management should be about managing, and anticipating financial pressures, and being proactive rather than reactive”

Wendy Allen, PCS Credit Management


“Credit control is not just about having clear, robust debt collection processes in place,” she states. “It can also be preventative, in identifying suitable customers through applications forms and credit checks, so that you don’t then encounter payment problems further down the line.”

Recruitment companies need to maintain good relationships with their clients, as they sit in a strategic position between would-be employers and potential employees. Good relationships are also the foundation for sound credit management, as Wendy advises.


“Stay on good terms with your customers and clients, because that’s how you encourage them to pay for your services on time, every time”

Wendy Allen, PCS Credit Management


External Support

Credit management can feel like a challenge when the pressure is on. It is a specialisation, which is why seeking independent, professional advice can make all the difference.

“Sometimes a different perspective helps,” Wendy concludes, “because it enables you to see what systems you need to put in place, or tighten up, to give yourself a firmer financial base. The whole process of managing your invoices and getting paid on time can be challenging. Getting the right kind of support is essential.”

To discover how to strengthen the financial control in your recruitment agency, please call PCS Credit Management on 0161 941 7511  or visit