Staffing Factoring: Payroll Funding for Temporary & Contract Agencies
The fundamental hurdle in the staffing industry is timing: you must fund gross payroll, statutory withholdings (FICA, FUTA, SUTA), and workers' compensation every Friday, while enterprise corporate clients often demand Net 45, Net 60, or even Net 90 billing terms.
Staffing payroll factoring converts approved client timesheets into liquid payroll cash within 24 hours, allowing staffing agencies to scale rapidly without running out of working capital.
How Staffing Factoring Solves the Payroll Gap
- Timesheet Submission: At the close of each work week, your staffing candidates log their billable hours and obtain supervisory signatures.
- Invoice Factoring: You generate invoices and submit them alongside signed timesheets to your staffing factor on Monday morning.
- Same-Day Advance: The factor advances 90% to 95% of the gross invoice amount directly to your payroll account by Tuesday, providing cash to fund direct deposits on Friday.
- Client Remittance: When your corporate client remits payment on Day 45, the factor releases the remaining reserve to you minus their discount fee (typically 1.2%–2.0%).
Staffing Industry Metrics
- Typical Advance Rates: 90% to 95% (high due to verified labor delivery).
- Back-Office Services: Many specialized staffing factors provide free back-office software, automated payroll processing, candidate direct deposit distribution, and payroll tax filing services.
- Unlimited Scalability: Win a 100-person contract with an enterprise client on Monday with complete confidence that your weekly payroll will be fully funded.