WHEN PAY-AND-BILL COMPANIES DON’T WORK - 3 CASE STUDIES OF 2017 TBOS CLIENTS
by Liz Seyi Digital marketing manager2017 was a fantastic year for TBOS with many new recruitment agencies being set up and our existing clients experiencing brilliant turnover and profit growth. However, one of the main growth areas in 2017 was existing agencies who were looking to outsource their back office and accountancy processes to TBOS. This included agencies who already had financial arrangements in place or agencies who wanted to centralise their internal processes with one organisation. However, there were a few agencies in 2017 who came to TBOS as they were experiencing issues with their existing Pay-And-Bill provider and wanted TBOS to see if they could help. This meant not only looking at their existing costs and services, but often adding in the accountancy services which were not included by the Pay-And-Bill provider.
Below are 3 case studies of recruitment agencies that TBOS helped move from their existing Pay-And-Bill provider to the TBOS Complete service:-
IT RECRUITMENT AGENCY
TBOS
were approached by an IT recruitment agency who were experiencing constant
payment issues to their contractors from their Pay-And-Bill company. Every month their contractors were either not
paid on time or were not paid correctly which was causing the agency to spend
their time resolving these issues instead of making sales. The agency also had no idea of the costs they
had paid for the service as they did not have an accountant looking after their
books on a regular basis. TBOS analysed
the cost of their existing Pay-And-Bill facility and they were paying a service
fee of 2.75% of turnover which over the first 9 months amounted to £22k (which
did not include the cost of their external accountant). TBOS arranged an Invoice Finance arrangement and projected
with the cost of a full back office and accountancy service, the service fee
would come in around 1.35% with an annual cost of £15k - this was a saving of
£14k per annum. Since moving, the agency
has experienced no issues with their contractor payments and has monthly
management accounts so they can both control and understand their business
finances each month.
EDUCATION RECRUITMENT
AGENCY
TBOS were approached by a new start up education recruitment agency who were
using a Pay-And-Bill company to raise their invoices and fund their invoices
but each week (on a Thursday) they had to process the Contractor
Payroll and pay the contractors themselves. This is due to the numerous payroll
processing issues that they and their contractors had experienced at the
beginning of their facility and the ongoing invoicing issues they had
constantly been experiencing. The agency
directors were also doing their own bookkeeping which was taking their time
away from recruiting and growing their agency.
TBOS analysed the cost of their existing Pay-And-Bill facility and they
were paying a service fee of 2% of turnover, which over 8 months had amounted
to £9k (which did not include the time they had spent running the payroll
themselves). TBOS arranged an invoice
finance arrangement and projected the cost of a full back office and
accountancy service the service fee would come in around 0.87%, with an annual
cost of £7k - this was a saving of £6k per annum. Since moving, the agency has doubled their
contractor numbers due to the additional recruitment time they now have and
they now understand their monthly profitability due to the monthly management
accounts produced.
FINANCIAL SERVICES RISK
RECRUITMENT AGENCY
TBOS were approached by an existing agency who over
the past 12 months had been using a Pay-And-Bill provider, but were concerned
that as their contractor numbers and charge rates were increasing, the costs
would start to escalate out of control.
The agency also realised that they no longer required the funding
provided by the Pay-And-Bill provider as they had a large cash-flow surplus
from their permanent placements. The
agency was not only paying for the Pay-And-Bill provider at 3.25% of turnover,
but also paying for a part time bookkeeper and an external accountant, as well
as the distraction of their internal consultants raising their permanent
placements invoices. TBOS analysed their
costs and projected their new cost by using the TBOS Complete solution (full
time back office and accountancy solution) without using their existing
external resources and there was an instant cost saving of £6k per annum (plus
a cost saving of around 60k by not using the Pay-And-Bill Provider’s
funding). Since moving, the agency has
realised the advantages of having one company look after all the financial and
processing parts of their business and now has consolidated figures produced by
one source instead of multiple.
TBOS gets at least 2-3 enquiries per week from disgruntled recruitment agencies using a Pay-And-Bill provider who is causing issues with funding, raising incorrect invoices to the clients or making incorrect payments to the contractors. TBOS completes a full analysis of their current costings and service issues to see if we can provide its services. Due to the TBOS pricing structure (per week per contractor) if the agency is providing contractors, is paying full time temps or has a large number of workers each week then TBOS will often be much cheaper and provide a more comprehensive service. Also, with the additional services of credit control, management accounts, VAT returns and year end accounts all under one roof, this then provides a complete solution that the agency can use to grow their business.
For more information to see how TBOS compares to your existing Pay-And-Bill provider, please contact our office.
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Created on Mar 23rd 2018 06:33. Viewed 496 times.