Invoice Finance for RPO’s
RPO’s are becoming a larger part of day to day life in the recruitment sector. They offer an opportunity to supply large customers and can be a game changer in terms of revenue. However, they do pose a challenge in terms of cash flow because many invoice finance providers refuse to finance invoices to RPO’s. The good news is that Funding Solutions can help.
What are RPO’s?
An RPO is a “Recruitment Process Outsourcing” business. It allows large organisations such as NHS Trusts and Royal mail to outsource their recruitment process. This reduces their workload and means they don’t have the challenge of dealing with numerous agencies and a high volume of invoices and timesheets.
Why don’t invoice finance companies like RPO’s?
Recruitment agencies will be working for an end customer but instead of invoicing that end customer they invoice the RPO who in turn consolidate invoices from numerous agencies and then invoice the end customer.
There are typically 2 challenges. Due to the level of invoicing via the RPO, their own credit limit may not be sufficient to support the volume of invoices they are managing. The other challenge is the contracts they issue to their suppliers. These are often lengthy and have onerous ‘Pay when Paid’ clauses. This means they will only pay and will only be liable to pay when the end customer pays them. This can make an invoice finance agreement unenforceable.
Funding Solutions Can Help