With Brexit talks well under way, those in the recruitment industry have supported calls for the government to ensure thorough negotiations with timely payments from overseas clients for UK agencies, post-Brexit.
Late payment has plagued the UK economy for many years as a result of poor payment practices from both UK based and overseas companies. According to research SMEs are missing out on £250 billion each year due to late payments, with progress on tackling this issue slow. These issues not only impact the businesses themselves, but ultimately the UK economy will take a significant hit as businesses struggle to maintain their cash flow, and in worst case scenarios, entering into insolvency.
SMEs with a turnover of under £1 million are waiting on average 72 days for payment from their customers; for the majority of businesses this can have a significant impact of cashflow, however this is particularly true for those in the recruitment industry that require cashflow to be consistently positive in order to pay for the salary of temporary candidates whilst awaiting payment from the clients themselves.
An article in the Recruiter has quoted Mike Cherry, chief executive of the Federation of Small Businesses, as he urges the government to find a ‘quick and easy’ remedy for B2B overseas disputes post-Brexit.
With dispute resolution between UK and EU countries quite an arduous task currently, recruiters want the government to ensure that the process is improved rather than worsened.
Here at Zodeq, we have a great deal of experience in providing finance for recruitment agencies that, alongside numerous other benefits, allows recruitment businesses to keep their cash flow positive throughout a month.
We do this by providing invoice finance and invoice discounting; in short, these services involve a recruitment agency submitting their invoices to clients through Zodeq, we then provide a percentage of that invoice up front and the remaining percentage once a company’s client has paid. This means that recruiters are not having to wait 30, 60, 90 or any number of days to get paid.