Your services are in high demand right now. Hybrid work has increased the need for mobile technologies and digital workplaces, but many companies do not have the in-house capabilities to execute large-scale IT projects. More businesses need your services, and you need more contractors on your payroll. To keep them there, you need the funds to pay them.
IT contracting companies often find themselves in a unique position regarding cash flow management. Between working on short-term projects and waiting for payments, it can be challenging to make ends meet from one payday to the next.
A big part of the appeal of contracting companies is the agility they offer. They can be more responsive to sudden changes in the market because they do not have the same overhead as larger businesses. But while this flexibility is a big advantage, it can also be a major vulnerability. Unstable cash flow can lead to missed pay and other payroll glitches, quickly spiralling into a cash flow crisis.
Flexibly fund payroll for your contractors
One way to protect your contracting business from payroll problems is to partner with a funding company that specialises in payroll funding. This type of funding provides the capital you need to meet your payroll obligations, even when client payments are slow. And because it is not a loan, you have no debt to repay. Payroll funding is simply a cash advance against your receivables, which means the funding is repaid when your customers pay your invoices.
The fabric of IT contracting companies is flexibility. Staff choose when they are available for projects, and the company can choose the work they take on. Yet, a concern raised by many businesses is flexibility over the amount of payroll funding supplied. Often, you may have the cash to cover part of payroll and may not need funding for all of it.
In this case, you need a flexible solution that allows you to choose the amount of funding needed for each pay cycle. With this type of solution, you can choose the amount needed, giving you more control over your finances. This can be especially helpful for businesses in the IT sector, which often have fluctuating payroll needs.
Integrate front, middle and back-office systems
The challenges that arise in unintegrated payroll systems can be significant. They might create errors in employee pay, leading to confusion and frustration among staff. When you have issues in payroll, it also creates compliance headaches for your company.
Another issue is that it can be difficult to track employee hours and overtime when you leverage different systems for payroll and timekeeping. Disconnected systems increase errors in calculating pay, which again causes confusion and frustration.
Integrating payroll with your front, middle, and back-office systems helps you avoid challenges like these that create payday glitches in the IT sector. Connecting your systems makes it easier to manage payments and ensure everyone receives their pay on time.
Furthermore, by integrating your payroll funding solution with your payroll systems, you can quickly access the funds you need when processing each pay run. Integrating your payroll systems also unlocks real-time financial reporting, enabling you to monitor your income, cash flow and payroll expenses.
Mismatched payroll and billing cycles
Often, IT service customers want to be billed once a month. But your staff want to be paid fortnightly, if not weekly. Paying four weeks of payroll before you can raise an invoice is not easily solved with traditional funding lines. Payroll funding allows you to access funding for payroll when timesheets are signed so you don’t have to wait until the invoice is raised.
Confidence to take on more project work
You need more contracts to grow your business, but you will struggle to do so if you cannot retain your IT experts due to cash flow gaps. Instead, you need the confidence to take on more project work, knowing you can pay your staff on time, every time.
Payroll funding is one of the main reasons that contracting companies can take on larger projects and grow their business. With a regular influx of cash flow generated through payroll, contractors can better manage their expenses and take on more work. This is especially important in the IT sector, where contracts can often be of shorter duration, and businesses need to move quickly to take advantage of opportunities.
Payroll funding gives IT contracting businesses the confidence to accept more project work without worrying about cash flow gaps. You can focus on completing the project while paying your contractors on time. This allows you to focus on what you do best – delivering quality services to your clients.
A payroll funding solution can help you avoid payday glitches and keep your business running smoothly. So if you are looking for a more flexible way to fund your payroll, be sure to consider this option.
APositive’s Payroll funding solutions
When it comes to the financial side of IT contractor and consultant businesses, you need to get it right every time to retain and recruit the right staff as you grow. If you are a contracting company in the IT sector, then payroll funding could be the boost that your business needs to grow and succeed. APositive has the experience to help you take on this challenge.
Our Payroll Funding solution provides you with access to the money stuck in unpaid invoices. We also deliver a tech-integrated back-office solution with outsourced payroll options to remove the administrative burdens of managing it yourself.
Visit our Payroll Funding page for more information.