Invoice Finance offers small and medium sized businesses a fast and flexible funding solution to enable working capital access when they need it most.

While using unpaid invoices as collateral for accessing cash advances can be highly beneficial for businesses for a variety of reasons, Invoice Finance for recruitment and labour hire is one particular use case that is effective and common.

In this article, we’ll take a deep dive into the way that invoice finance can be used to strengthen your recruitment business and help companies in general effectively hire new labour by leveraging the value of their accounts payable.

To explore ScotPac’s Invoice Finance offering, visit our product page here.

What is Invoice Finance and how does it work?

Also known as debtor finance, invoice finance unlocks the funds tied up in invoices that have been issued to customers or clients but remain unpaid.

By providing an advance on up to 85% of the invoice’s amount within 24 hours, ScotPac enables businesses to better manage their cash flow without having to wait the 30, 60 or even 90 days it can take their customers to pay.

How does Invoice Finance work?

The process is fairly straightforward:

1. Issue invoices 

First you issue your invoices to your customer or client as usual.

2. Submit for funding

Then you submit those same invoices to your finance provider, such as ScotPac

3. Receive an advance

Then you receive up to 85% of the value of those submitted invoices up front as cash.

4. Receive the balance

Once the unpaid invoices are settled, you will then receive the remaining balance minus any required fees.

Why is Invoice Finance used for recruitment funding in Australia?

Recruitment and labour hire companies occupy a space in a unique industry for a few reasons:

  • Contractors and temporary workers need payment from client businesses
  • Cash outflows for payroll are frequent and high
  • Cash inflow from clients can take a significant period of time
  • Industry growth requires more and more upfront capital

All of this amounts to a significant challenge for effective cash flow management. With Invoice Finance for recruitment and hiring, businesses can ensure they have access to reliable and flexible funding when they need it.

How does Invoice Finance for recruitment and labour hire work?

When you work with a lending specialist at ScotPac, we make sure to customise our funding solutions to suit your business’s needs and cater for your business’s industry.

Invoice Finance for recruitment and labour hire is generally tailored in a number of ways:

  • Timed to cover payroll needs
  • Fast turnaround time
  • Flexible funding limits
  • Platform integration
Timed to cover payroll needs

A key benefit of using Invoice Finance for recruitment funding is that the cash advances can be accessed when you need it. With up to 85% of the value of the submitted invoices available, it is an effective solution to cover ongoing, consistent payroll obligations.

Fast turnaround time

Invoice Finance is unique amongst business finance solutions when it comes to turnaround time. From the moment of submitting an invoice or invoices for funding, your business can access the working capital in as little as 24 hours.

Flexible funding limits

Invoice Finance is inherently scalable. Thanks to the flexible limits – restrained only by the value of your invoices submitted – as your business takes on more and more clients it can access more and more advanced funding to keep pace.

Plus, you can choose which invoices to submit for funding and which ones not to, managing any associated administrative fees in the process.

Platform integration

For recruitment and labour hire companies, having a business finance solution that integrates with payroll and accounting platforms is highly advantageous. This streamlines approval processes and reconciliation needs.

What are the benefits of Invoice Finance for recruitment?

The many benefits Invoice Finance offers recruitment businesses and labour hire companies include:

  • Improved relationships with contractors and candidates as they are paid on time
  • Enhanced reputation with clients due to availability of contractors and candidates
  • Increased ability to take on more contractors and candidates
  • Increased control over cash flow management without being dependent on clients
  • Improved ability to proactive invest in growth
  • Reduce reliance on overdraft facilities and drawing on personal funds
  • More stabilised and consistent cash flow

Explore how Invoice Finance can suit your Recruitment Funding in Australia today!

Here at ScotPac, we have been providing tailored finance solutions to businesses for over 35 years. Currently, we support more than 9,300 businesses and fund $26.3 billion invoices annually.

So, if you’re looking to partner with a reputable finance provider to access the Invoice Finance you need for your recruitment and labour hire business, why not enquire today to learn more?

Frequently Asked Questions

How quickly can I be approved and funds accessed?

Applications for Invoice Finance are assessed by the ScotPac team and approved in as little as 24 hours, once approved, you can typically access funds within one business day of submitting an invoice. 

Is Invoice Finance for recruitment confidential?

It can be. There are two forms of Invoice Finance: 

  • Invoice Discounting – this type of invoice finance leaves the onus of collecting payment on your business, thus maintaining confidentiality with clients. 
  • Invoice Factoring – this type of finance outsources the debt collection to your finance provider but may compromise on confidentiality. 

Are all invoices eligible for financing?

If you operate as a business-to-business company, as recruitment and labour hire firms do, and deliver services to creditworthy businesses, your invoices are likely eligible for funding. 

Is Invoice Finance a short or long-term solution?

Invoice Finance leaves the controls in your hands. Many lenders, such as ScotPac, offer flexible terms without lengthy lock-in contracts, so you can access the working capital you need only when you need it. 

Can non-recruitment businesses use Invoice Finance to fund labour hire?

Of course. Invoice Finance is an effective finance solution for businesses in many industries and can be used to invest in growth by hiring more staff when you need it.