Factoring

DO YOU WANT THE STABILITY OF FACTORING BUT REDUCE THE COSTS?

 

PAYEme/GRENKE UK

Are delays in payments crippling your cash flow or are your factoring costs sky high?

In 2021 PAYEme and GRENKE UK entered into an exclusive nationwide arrangement which allows PAYEme the ability to offer a reduction in your factoring costs. This exclusive arrangement means’ by working with both PAYEme (for your umbrella support) and GRENKE UK (for your factoring), PAYEme can offer exclusive tailored solutions that will reduce your factoring costs.

What is Factoring

Factoring is where essential funds can be released by GRENKE UK who will effectively buy your client invoice and offer a release of funds immediately to reduce your risks, improve your cash flow and increase your profit margins.

How does factoring affect an agency

Factoring is often a critical aspect within the temporary/contract recruitment sector to reduce debt risks created by client payment terms but high factoring costs will always cut into your margin.

This is where PAYEme and GRENKE UK can help your agency keep those costs to a minimum.

Example

The below examples are based on a contractor hourly pay rate of £25, agency hourly charge rate of £30 and a 40 hour working week, giving a weekly payroll cost of £1,000, a net client invoice cost of £1,200 and a £200 margin/timesheet value.

If your client invoice payment terms are 30 days’ then this will mean your agency making 5 weekly wage payments before the first client invoice was paid (if paid on time). Only upon invoice payment would this be the point that your agency receives any profit margin for the related week but would always be 5 weeks in arrears due to wage payments.

Gross Invoice £1440
Net Invoice £1200
Worker wage £1000
Timesheet value £200
Advance wage risk per candidate £5000
With Factoring

The factoring company would calculate their fees based against gross invoice value and deduct this from the net invoice value with the remainder being paid over to your agency immediately. This way reduces debt risk from paying wages and client payment terms for a percentage of your margin but you lose a percentage of margin.

Gross Invoice £1440
Factoring fee at 3.5% £50.40
Amount released to agency £1389.6
Timesheet value after deductions £149.60
Timesheet value difference with factoring 25.2%
Who are GRENKE?

GRENKE UK made its move into the UK market in 2002 and are part of the globally acclaimed GRENKE GROUP. They offer a big partner stability with tailored factoring solutions that will allow agencies to concentrate on growth rather than worry about client payments and cash flow.

Why GRENKE?

GRENKE’s specialist teams’ work with customers to help make their investments and business finance decisions work in their favor. Whether a small local agency or a national enterprise, GRENKE seeks to help release cash flow, improve operational performance and potentially help increase the value of their businesses. From custom tailored terms, to an extensive network of local branches, to unparalleled
personal advice and assistance that businesses depend on, GRENKE help to make the right decisions for their finances and business goals.

A few extras on GRENKE:
  • Have been providing established factor support for over 40 years.
  • Have 10 regional offices within the UK and have presence in 33 countries across the globe.
  •  Last year they provided funding support to the value of £3.5 billion.
  • Have a very strong support network that focus in the Invoice Finance sectors.
  • Specialise in providing factor/invoice support within the Recruitment Sector to all sizes of agency.


For further information, click on the link below

Require Assistance?

Our team are ready to help with any of your queries.
Just leave your details and we'll be in touch.