Finance, funding and payroll

Recruitment businesses, especially those with contractors and temps, often need to pay workers before clients pay them. Finance, funding and payroll specialists cover invoice finance, accountancy, finance directors, payroll and financial products for recruiters and contractors.

What to look for

• Funding built for recruitment. Invoice finance designed for agencies can fund a weekly payroll, and often comes with back-office help such as payroll, invoicing and credit control.
• The full cost. Compare the service fee, the discount charge (the interest) and any extra fees for setup, audits or leaving early.
• Flexibility. Funding that grows with your sales, without long minimum terms or big exit fees.
• Advice from people who know recruitment. Accountants and finance directors who understand agency margins, contractor payroll, IR35 and VAT will spot problems before they cost you.
• Payroll you can rely on. Accurate and on time, every time. Late or wrong pay loses you contractors.

Questions to ask before you sign

• What are all the fees, and what would we have paid last year on our numbers?
• How much of each invoice do you pay us upfront, and how quickly?
• Is it recourse or non-recourse, and what happens if a client doesn't pay?
• What's the minimum term, the notice period and any exit fee?
• Who will we deal with day to day?

Watch out for

• Comparing headline rates only. The total cost is what matters.
• Long notice periods that make it hard to move as you grow.
• Umbrella companies you haven't checked. Recent rule changes mean agencies can be held responsible for unpaid PAYE when workers are paid through an umbrella company, so check the ones you work with carefully.