Staffing factoring
Staffing firms fund weekly payroll while clients often pay on net-30 or longer schedules.
Cash flow pattern
Payroll often runs weekly or biweekly while clients pay after timecard approval. A missed approval cycle can create an immediate funding gap.
Typical invoice documents
- Approved timecards
- Client service agreement
- Payroll register summary
- Invoice
- W-9
- Aging report
Common factoring fit
Can fit staffing firms with approved timecards and business clients that pay on predictable terms.
Contract clauses to check
- Timecard approval requirements
- Payroll-tax reserve exclusions
- Client credit limits
- Dilution from credits or disputed hours
- Minimum volume tied to payroll cycles
Industry-specific risks
- Unapproved hours can become ineligible receivables.
- Payroll obligations continue even if a client pays late.
- Client concentration can be high in early-stage staffing firms.
What factoring does not solve
- It does not solve payroll compliance or worker classification issues.
- It does not guarantee clients will approve timecards.
- It does not replace margin discipline on placements.
Related calculator: Effective cost calculator. Use it for a local estimate only.
Related reading
Sources
- Fair Labor Standards Act - U.S. Department of Labor. Accessed 2026-05-19.
- Uniform Commercial Code Article 9 - Uniform Law Commission. Accessed 2026-05-19.
- Secured Finance Network - Secured Finance Network. Accessed 2026-05-19.
Financial disclaimer. This page is educational only and is not financial, legal, tax, accounting, or credit advice. Factoring terms vary by provider and contract. Read the full disclaimer.