Credit control for recruitment agencies - reduce late payment risk

• Cash flow challenge: My agency’s payroll is weekly, but client payments are delayed - putting financial strain on operations.

• Perfect for: Recruitment agencies and staffing firms needing to manage credit risk and stabilise cash flow while waiting for client payments.

Novuna helps recruitment agencies strengthen credit control processes and secure bridging finance when clients pay late, either through our award winning in-house service or by comparing the market to find the best fit for your agency.

We connect you with providers experienced in funding for recruitment businesses, help you apply, and make sure you get the right deal for your needs.

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Why credit control matters for recruitment agencies

A single late or unpaid invoice can be costly. Here’s how poor credit control affects recruitment firms:

• Payroll costs are fixed (weekly), but client invoices may be on 30, 60, or even 90-day terms.
• Poorly managed credit limits or outstanding payments can limit your ability to scale.
• Disputes over timesheets or placements can delay payment further.

Strong credit control reduces the risk of unexpected cash gaps, helps maintain workforce morale, and sets your agency up for steadier growth.

Credit control workflows that work

• In-house credit control:You manage credit vetting, invoicing, reminders, disputes, and escalation directly. This gives control and flexibility but requires time and tight processes.
• Outsourced credit control:  A specialist provider manages collections discreetly. You retain control of client relations while reducing admin burden.

Use the right model, or a hybrid, to match your team’s capacity and agency size.

Key credit metrics to track

• Days Sales Outstanding (DSO): How long invoices remain unpaid.
• Dispute rate: Frequency of delayed payments due to issues with timesheets or work delivery.
• Payment accuracy: Percentage of invoices paid on first issue without correction.

Monitoring these metrics helps you identify weak points and intervene early - especially before cash flow is hurt or funding becomes necessary.

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Credit control and recruitment funding

With good credit control in place, you can access more favourable invoice finance or discounting. Providers see lower risk and may offer better terms. Whether you're using invoice factoring or invoice discounting, proper credit practices give you bargaining power and smoother access to cash.

Tips, tools, and templates

• Use standard email scripts for friendly payment reminders.
• Set up automatic overdue reminders via your finance system.
• Review client credit limits regularly, especially for large or growing accounts.
• Escalate politely but firmly when payments are late.

Templates and workflow tools can help keep your team consistent and efficient through fluctuating payment patterns.