A Local Payroll Provider Discusses Payroll Funding
Auto repair shops have unique business models, and occasionally they can have a great deal of outstanding bills to be paid. Delays in accounts receivable for repair shops generally have to do with insurance claims or large balances from big jobs, and when several customers are late on payments it can cause stress for the owner and employees.
In a situation such as this, the last thing you want to do is miss a payroll period or lose the ability to take an opportunity which presents itself and requires capital. Instead, some business owners look for another solution, and payroll financing is an option to consider when your company needs a short term influx of cash with the purpose of covering payroll.
Our company has provided payroll services for clients in the Bay Area and across the nation for many years, and it’s our mission to help companies succeed by taking on their administrative tasks and allowing them to focus on the important things. From payroll and HR to background checks, time and attendance and much more, we take care of the time consuming and tedious tasks and allow you to chase your goals.
Many of our clients in various industries have run into a situation much like the one described in the opening paragraph of this article, and it doesn’t mean they are bad business people or they’re running a bad business. On the contrary, strong clients are sometimes in need of payroll financing and it has distinct benefits when used correctly.
When the alternative to payroll financing is missing a pay period, financing should be the chosen option when at all possible. You shouldn’t overextend yourself as a business owner, but a missed pay period can cause irreparable damage to company morale and could cause your best people to leave.
Another situation where payroll financing can help is when payroll would keep you from pursuing a potentially lucrative opportunity or moving your business forward. You can use payroll financing to make your pay period and use your other capital to invest directly to raise more money for the future.
We have discussed when it’s appropriate to seek payroll financing, let’s also clearly define what payroll financing is. Some people use the terms payroll financing, payroll factoring and invoice factoring interchangeably, but they don’t have the same meaning.
Payroll financing involves the disbursement of a loan specifically made to cover payroll expenses, usually with a short repayment date. We partner with a payroll financier which gives great terms on 28 day payroll loans, and you can qualify using bank statements.
Payroll factoring or invoice factoring involves “selling” your accounts receivable to another party for less than they are worth. While this does make sense sometimes, it’s a different practice than payroll financing.
If your auto repair shop is in danger of missing payroll, we want to help. Our team of payroll professionals can advise you, and we can help you operate smoother moving forward. Give us a call today for more information.
