You have just completed 30 days of hard work, had your time-sheet signed off and submitted your invoice. Now the big wait starts… You’ll be paid after another 45 days… or not?
Every freelancer has asked him or herself the question, ‘When will I be paid?’ While the payment terms are often discussed and agreed upon beforehand with the client, in reality these are not always upheld. So when the payment deadline comes and goes and the figure in your bank account remains the same, it means you can’t efficiently manage your cash-flow. This leaves you to ask yourself once more, ‘When exactly will I be paid?”
There are two practical ways we advise our freelance candidates that will answer this question; one is to operate their freelance entity under a payroll company. The other is to work with a factoring company.
So what exactly is factoring?
Factoring is a method of financing where a business uses a third party to advance the payments of their invoices. The factoring company is then not only responsible for providing you with the invoiced amount (usually within a few days), but they also take on the administrative risks.
But how does it work?
When making the decision on which factoring company’s services you would like to use, we recommend you work with one that allows you to decide which client you want to factor. Whether it’s one client, multiple clients or all of your clients, it should always be your choice.
The company will first screen your client and if the outcome is positive, you’ll be able to submit your invoice for factoring. This process is always simple – either uploading a copy of the invoice and approved timesheet to their website or sending it over via email. Your invoice will be paid within a short and specific time frame, enabling you to manage your cash-flow more precisely.
Why would I pay someone else to pay me?
Besides the simple, yet incredibly important ability to manage your own cash-flow, there are other reasons we’ve seen factoring rapidly becoming the freelancer’s favourite financial tool:
- You’re completely insured
Factoring companies insure all invoices, so if, on the unlikely chance your client goes bankrupt, you won’t feel the pain.
- Your debt-management is outsourced
Any debt is handled by a professional partner so you don’t have to worry about damaging your business relations. You can now completely focus on your core business.
- You can take on more work
You don’t have to turn down those great opportunities anymore because of the client’s long payment terms.
- You have low-entry access to work capital
It’s hard to get funding from the bank these days, so this is a perfect way of financing your growth plans, a large project or fluctuating need for additional cash.
When discussing the possibilities with our own candidates and clients in The Netherlands, we highly recommend the services of EasyStaff Factoring. Besides the fact that we have first-hand, trusted experience of the way they work, they are one of few companies that are able to pay the invoice within 24 hours. For these reasons and more, we have negotiated an attractive discount with EasyStaff Factoring for our clients and candidates operating in The Netherlands. You can get this discount by quoting Panda International in your service request.
If you are interested in the factoring services of EasyStaff Factoring, or would simply like to find out more, you can visit their website (click here) or get in touch with them on +31 (0)20 – 6183131.
Don’t forget to ask about the discount reserved for candidates working through Panda International!
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