With so many recruitment outsourcing and payroll options available in the market it’s worth being well informed so that you make the right decisions for your recruitment agency…

Reliability and value
Make sure you have a reliable supplier with a great reputation.  Ensuring consistent and reliable cashflow is the backbone of any successful recruitment business as it impacts on every aspect of both existing and new business.  Whilst it is important to ensure good value for money, do not compromise on proven excellent service levels that can be verified by other clients.   In reviewing potential suppliers, really quiz the sales person you meet – do they echo the professional, corporate, friendly image you might be looking to achieve in your own business?

Expertise and experience
With the complexities of ever-changing legislation, it is vital to have access to the most up-to-date and expert advice.  An experienced provider with proven expertise in the recruitment market is best placed to offer helpful support when you most need it.  Check that you are dealing with a recruitment specialist – you need to be able to trust their knowledge of practical issues in the recruitment sector.

Keeping it simple
No matter what method you use to finance and administer your temp payroll, outsourcing all aspects to one specialist supplier makes a lot of sense.  Whether you run the payroll yourself, have your own staff or outsource to a payroll supplier, having it managed by recruitment experts, under one roof, will increase efficiency and lower fixed overheads within your business.  Managing one supplier will save you time and energy.  It will also save you the trouble of manipulating your finances when your financier hasn’t released enough funds to cover payroll.

Another advantage of working with a recruitment specialist is that they will take care of tax and NI for your temporary candidates and will include this in the weekly payroll cost.  This frees you up from the burden of filing time consuming tax and NI returns.

Accessing accurate management information
One of the most important requirements is easy access to accurate management information.  In planning for the next steps, you need to know that you have strong cashflow behind you, plus the controls to measure performance.  Producing meaningful management information takes time, and can divert attention from driving the business forward.
Look for simple administrative processes with a reputable online communication system that is reliable, straightforward, user-friendly and accessible whenever you wish to use it.  Some suppliers offer a bespoke recruitment package that removes the hassle associated with processing payroll and producing management information.  Ideally you will need a web based application that can provide reports on areas such as gross margin, aged debtor and working time directive analysis.

Responsiveness and flexibility
Problems can’t always be avoided – if timesheets are missing or arrive late it is important to know that the problem can be resolved quickly and with a minimum of fuss.  Find out how much flexibility there might be to support you through particularly difficult times.  Get to know the people dealing with your account and make sure you have dedicated phone and email contact details for them.

Good suppliers will provide a dedicated back office team to include your own payroller and credit controller who will look after your account, together with a client relationship manager who will organise training, manage margin payments and coordinate the account as a whole.  You should have regular reviews with your credit controller to keep you up to date with your ledgers and occasional visits from your client relationship manager to ensure your facility is structured in the best way to meet your requirements as your business grows.

Adapting to the impact of recession
With the recession now firmly taking hold and continuing pressure on profit margins, there is much churn in the market with short term contracts and low pay rates.  This means that suppliers need to demonstrate they can be flexible and in some cases take a longer term view to win business.   Ask your supplier how they have dealt with other difficult situations, and what actions they might be able to consider for your own business.

Fair pricing
Look around for the best deal – not all finance and back office services providers are the same.  As the market becomes more competitive there are some very good deals for recruitment businesses.  However, always beware of hidden charges and check that any attractive initial pricing offer matches an ongoing high standard of client service.

Understanding specific concerns and risks
VAT bills can be a major burden when running any business and can often be responsible for many businesses not surviving the first five years.  Some providers have developed a VAT retention which accrues the VAT liability generated from the facility and then when due this is released to you enabling you to pay your VAT return with ease.

Holiday pay, as a legal requirement also needs to be accounted for.  Whether it is paid on a weekly basis or accrued separately,  make sure you work with a supplier that can tailor this service to your requirements.
Also check that you will have protection against bad debt.  Suppliers can apply for credit insurance for each client set up through their facility, which means that you will be protected against potential bad debt.

Transparency
Some of the best online systems give you full transparency and control of invoicing, credit management and payroll services.  Numerous online reports, many of which have live updating, enable you to view up to date and historical ledger notes on each account, details of payments made to candidates, invoices raised and fees charged.  This all helps to put you firmly in control and allows you to have as much or as little involvement as you need.

Maximising funding
With cashflow so crucial to any business, with respect to temporary invoicing you should look for an advance of 100% upfront with a signed timesheet and the appropriate credit insurance, on a recourse basis.  This allows you to not only pay your candidates but give you margin without having to wait for invoices to be paid.