A recruitment agency supplying temporary staff may need to run payroll before clients settle invoices. Invoice finance comparison should therefore focus on eligible billing, worker payments and the timing of cash release.
The decision that deserves the closest review
Explain how timesheets are approved and how invoices can be disputed. Compare the percentage advanced, excluded customers, service fees and responsibility for collections. Ask how payroll support, if offered, changes the cost and administration of the facility.
A hypothetical example
An agency grows quickly with one large customer. Its sales rise, but approved timesheets and customer concentration determine how much funding is available. It compares a realistic debtor schedule rather than a headline sales forecast.
Receivables and actual availability
Invoice finance releases funding against receivables accepted by the provider. Eligibility, reserves, debtor concentration and charges affect accessible cash. Factoring and discounting can differ in who manages collections and how the arrangement fits the ledger.
Available funds and the complete borrowing cost
Use the same funding amount, expected usage and period for each illustration. Show net cash available after deductions as well as total payments. Interest, service charges, minimum fees and exit costs should be visible where applicable; an advertised rate alone may not describe the full arrangement.
| Comparison item | Question to resolve |
|---|---|
| Approved timesheets and eligible invoices | When does an invoice become eligible for funding? |
| Customer concentration and payment terms | How are disputes and credit notes handled? |
| Payroll services and total facility charges | Are payroll services optional and separately priced? |
Ask the provider to demonstrate availability and costs using a realistic business example. Keep eligibility assumptions separate from funds that are approved and available to draw.
Evidence to prepare before applying
Prepare current business records and a cash forecast that explains when the money is needed and how it will be repaid. Reconcile the figures with supporting documents. Ask the provider which evidence it needs for this product instead of assuming every application uses the same checklist.
Model payroll against accepted receivables
Build a weekly forecast showing approved timesheets, invoicing dates, payroll and expected customer payments. Identify disputed shifts and any customer concentration. This gives the provider a way to illustrate usable availability rather than apply an advance percentage to every item in the agency’s sales forecast.
Compare a normal week with a week containing late approvals or fewer placements. Ask how minimum charges, payroll support and collections affect each illustration. Keep a cash reserve assumption visible so the agency can see the remaining gap when an invoice is not accepted or the approved advance changes.
Identify the actual UK borrower and explain overseas trading where it affects the cash forecast or proposed obligations.
A mistake to avoid
Assuming every booked shift creates an immediately fundable invoice.
Check the operating and exit process
Identify the reporting, drawdown and repayment steps required during the agreement. Ask what happens if a customer pays late, usage falls or the business wants to exit. Establish the release of any security or guarantee in writing; a final payment and the end of every connected obligation should not be assumed to be identical.
Questions before choosing
Can finance support rapid growth?
It can release eligible receivables, but model customer limits, disputed work and the extra payroll costs of growth before relying on it.
Should an agency compare facilities using gross invoices alone?
Include the provider’s deductions, eligibility assumptions and actual payroll dates. Gross billing can differ from the cash available when workers must be paid.
Sources and further reading
Research date: 6 October 2026. Refer to the current linked guidance and written provider or adviser terms when making a decision.