Simple steps to make sure you’re business is in a strong position to enter the New Year
With the Christmas holiday period fast looming into view it’s tempting to switch off a bit and concentrate on enjoying yourself after what has been a tough year.
However, that can so often be a mistake for recruiters, and particularly so in the current tough economic environment where cashflow is king. So instead, consider some simple steps to making sure you’re in a strong business position to enter the New Year, rather than struggling before 2012’s even started.
First up, make sure all your staff and their clients are aware of relevant dates for payment, i.e. when will they receive their pay and when timesheets need to be submitted. There is nothing worse than being accused of being a Scrooge and not paying wages before Christmas, unless staff are fully informed of this beforehand.
This in turn puts extra pressure on your own cashflow. In particular, for recruiters using payroll services time is going to be tight if you intend to run a payroll between Christmas and New Year’s Eve. Workers typically return after the bank holidays on Wednesday 28th but to ensure temps get paid before New Year’s Eve you will need to have received all timesheet data and calculated a payroll that week.
This added pressure on your cashflow is made even worse with the withdrawal of accrued holiday pay. Temporary workers are legally entitled to take paid leave, the amount of which depends on their contract and the hours they work, but it is the recruitment agency’s responsibility to reimburse this holiday pay. Furthermore, the agency cannot invoice anyone in respect of the agency worker while they are not working and so cannot create availability through their invoice finance facility to fund the holiday pay gap.
It’s also worth considering retaining a larger than normal amount of cash and easily accessible funds for unforeseen emergencies during the holiday period, to cover temporary staff, payment queries, technical difficulties, unexpected invoices and higher than normal charges for emergencies during the festive period, e.g. for locksmiths, taxis or hotels.