Recruitment companies don’t often make headlines for being subject to late payments, but increasingly they are turning to trade credit insurance for protection. With over 9,000 agencies turning over more than £250,000 each year in the UK, the industry is contributing a whopping £35.1 billion to the economy.
Despite these impressive figures, many recruiters still end up in disputes with clients over payment delay or even refusal.
Only last week recruiters were voicing their concerns to one industry body, the Association of Accounting Technicians (AAT), and urging the Prompt Payment Code to be adopted by companies with 250 staff or more with whom recruiters work.
This, along with multiple other recommendations, proves the extent to which recruiters want the industry to pull up it’s socks and work with clients who promote, and practice, a responsible payment culture.
Recruiters who are involved in contracting or temporary labour will know the feeling of restricted growth well, as they often experience lengthy waits before clients pay invoices for labour that has been provided. What InvoiceInsure’s trade credit insurance does is go beyond receivables, by guaranteeing that if a weak client faces insolvency or protracted default, any outstanding invoices will get paid.
Trade credit insurance therefore protects debts after they have been invoiced, and goes further by ensuring that any potential losses from insolvencies do not affect unpaid timesheets.
Why so many unpaid invoices in recruitment, we hear you ask. Many temporary workers may be offered a permanent position, which means the employer has not anticipated the fee for the agency and has not read their terms in depth. Another scenario is that a worker is recruited for an entirely separate position to the one their CV was recommended for.
Both of these situations often lead to debtors in to a scenario where they do not pay money owed to the agency. Late or refused payments have an impact on recruitment agencies of all shapes and sizes, but small agencies in particular whose cash flow will be tied up, may be limited severely from expanding. Sometimes they may even struggle to pay their own employees’ salaries.
Taking out invoice insurance is a simple step to a smoother running recruitment agency. It gives you piece of mind, protects your money, and reduces the obstacles that may be getting in the way of your cash flow.
Don’t delay and put your business at risk. Take out invoice insurance today.
We’d be delighted if you get an invoice insurance quote for by clicking the link below – it’s a simple process and won’t take long.
Giulia Macgarr