Starting a new business can sometimes be difficult. The owner has their business plan and they know what needs to be done but when it comes to some of the tasks they need to hire employees. It makes the day to day operations run smoothly when more people are pitching in and helping. Currently the income does match the needs of hiring a staff so the owner needs to figure out how to run their business while paying the incurred bills.
Bills Businesses Accrue
The bills include all payments to utility companies as well as vendors that keep the business up and running. Assuming the owner is not the only employee this means he/she also has to take into consideration payroll as well as tax liability.
Focus On The Business Not The Bills
By utilizing a payroll funding company a business removes the need to employ an accounting staff. The accounting team at most businesses consisted of accounts receivable, accounts payable and payroll factoring. In some cases there will also be a human resources employee that helps with benefits and tax information alongside the payroll employee. These will eventually be necessary employees but in the early stages of running a business a payroll funding company can take their place and remove a lot of stress and worry from the business owner.
What Does A Payroll Funding Company Do?
A payroll funding company will actually pay all of the bills and send invoices and collect funds for business. There are fees added to this but the fees are less than the cost of employing an accounting staff. The fees slowly reduce as the business begins to make more and more revenue. The responsibility of the business owner will be to send all invoices to the payroll funding company. The company will then go over the invoices and calculate all funds that are due to be collected for the business. The payroll company will then transfer those funds to the business minus their percentage for doing the leg work. Once the funds are transferred the business can pay any bills and carry on as normal. The payroll funding company will then collect the money owed from the invoiced vendors and reimburse themselves for the process.
How Does This Save The Business Time?
The payroll funding company does all of the busy work on the invoicing end of the business. The business owner does not need to worry about sending invoices to clients and waiting 30 or more days for the payment to be made and returned. Once the payment is returned then the business owner would need to log it in as an account received and deposit the money and then begin paying bills. Because the payroll company instantly paid out the owner for all of this pending incoming money the owner does not need to worry about receivables and bank errands. This allows the owner to focus on the business and not the paperwork. As more business is acquired and the company grows it is then up to the owner to decide whether they want to employ an in house accounting team to handle receivables, payables and payroll factoring.
Utilizing a payroll funding company will save a business time while offering flexibility to focus on the business first and the money second. Depending upon the size of the business then can be a short term or a long term agreement to help ease the stress of dealing with invoices and money collections.
