The economy is growing, which means the working hours of temporary employees are increasing and with it the revenue of temporary employment agencies. This is obviously good news for the temporary employment industry! However, more payments have to be made, while payment terms are long and some clients they’re even longer. How does your organisation solve this?
The number of jobs in the Netherlands keeps growing and future prospects are looking excellent. The temporary employment industry accounts for the most part of this increase in jobs. So it can be said that the temporary employment industry is the frontrunner for filling vacancies.
In the last quarter of 2017, temporary employment agencies realised a total of 2.5 percent more revenue than in the previous quarter. This year, in weeks 5 to 8, there was a 5 percent increase in the number of hours worked compared to the same period a year before. Revenue increased by 8 percent. And the industrial sector performed the best within the temporary employment industry; there was an increase of 9 percent in the number of hours worked.
These are good numbers for the industry of course, but this also means that amounts needed to pay salaries have also increased. More hours, more money and more/higher invoices. That is very positive, but it also brings a challenge: pressure on liquidity also increases.
Payment of temporary employment
As a temporary employment agency it’s important to pay your temporary employees on time. This could be a monthly salary or weekly pay. A good liquidity estimate is a requirement here, but can you consider all developments in this liquidity estimate? And how much influence can you have on the payment terms for new, big clients? You often have to go with the standard payment terms of these big organisations. Especially the government where payment terms of 60 days are not unusual.
Does this ring any bells? Does it sometimes take 30, 60 or even 90 days before your client pays? Yet you still have to pay your temporary employees, as you don’t want a bad name as a nonpayer and you want to make sure the right people keep working for you. Good leadership is a part of this.
The question is: do the fast growing temporary employment agencies have enough liquid means to finance this growth, without exceeding their own creditors’ terms of payment? If there’s more to be paid, there has to be money available. Where do you get this money as a temporary employment agency? Has your organisation made a special reserve for this growth in the past, for example? Do you have any influence over the payment behaviour of your clients? Or is there a need for a modern way of financing?
We understand that it is tedious to have to wait for your clients’ payments and to have to keep taking this into account internally. The constant shift in your liquidity estimate is difficult and puts pressure on the internal organisation. You’d rather receive quick payment after sending the invoice so that the gap between income received and expenses paid on salaries is as small as possible.
A viable option to achieve this is by using factoring 2.0 by Togather. Factoring 2.0 means that you can receive 95% of the outstanding invoice amount within 2 days. This also includes any current outstanding invoices! This not only means a solution to your liquidity challenge, but it also minimalizes the risk of your customer not paying. Through using factoring 2.0 your working capital is increased and you can don’t have to worry about your obligations to your temporary employees. A modern way of financing.
Togather moves with the times, reacting to current financial demand, which is now showing growth. We understand what you need as an entrepreneur in the temporary employment industry. Stop waiting for your payments and get paid within 48 hours of sending your invoices. This way, your cashflow is well planned and you can be sure of your invoices being paid. Do you have clients abroad? No problem! Do you have ambitious dreams, but haven’t had the time to do anything with them because you’re busy with day to day tasks? Then this is your moment. Leave the financial fuss to us and focus on your dreams. Sounds good, right?
Curious about what we can mean to you? Click here for a calculation example and see exactly what you will receive and what it will cost, using your own figures. Or get to know us straight away by leaving your number.