Deciding to pursue temp factoring is the first step, but what should staffing firms, including those who are starting a staffing agency, look for in a factor?
Bruce Friedman, director of Assurance Services at SS&G, recommends asking peers within the staffing industry for referrals. “Ask around and see if you know somebody who has used the factor and had good experiences with them,” he advises.
By asking about potential factors before meeting with them, firms will be able to narrow their prospect list and save valuable time.
Friedman also recommends making sure the potential factor has a stable source of cash. While firms are probably not able to look at the temp factoring company’s finances, they can inquire as to how their company can be assured it will be able to receive its funds, Friedman says.
Stuart Gelb, Founder and President of The Liquidity Source, an independent financial advisory and consulting firm, suggests staffing firms select a factor that specializes in staffing firms.
“Factors who only specialize in staffing firms will better understand how your business operates and what its unique needs are,” he says. However, even if a staffing firm has a great factoring company or is getting a great deal, it is wise to review options annually.
“Banks get aggressive at times for all kinds of reasons,” he says. “If you find a better rate, you can go back to your factor and say, ‘We have a great relationship, but at these numbers, I’m thinking about leaving.’ Most often, they’ll beat the price to keep you on as a client.”
Recent graduates have the right mentality and mindset for temporary employment, as many have admitted to having little staying power both professionally and geographically.
