The Ideal Scenario in Recruitment from Outsourcing
If you have decided to leave your job to set up business on your own in the recruitment sector, you will only do it if you know the business intimately. You will need a little more than simply knowledge and that is a support system in place to ensure the efficient running of the operation guaranteeing compliance with statutory regulations and timely payment of staff. You should be able to create this ideal scenario by using an outsourced service provider.
The most important administrative task in recruitment is the payroll which is likely to be weekly if you are running a mix of weekly and monthly personnel. As long as you present the necessary details on time each week to the service provider, you shouldn’t need to worry about much else.
Tax and NI will be automatically deducted from the gross pay in each case with the total of those due and remitted to the ‘taxman’ and the staff receiving its money direct into their bank accounts. There will be a set deadline each week so that the BACS instruction can be sent to the individual banks for payment on Fridays.
At the same time the system will generate emails that are secured by password and sent to each employee.
Simultaneously, your service provider will raise the invoices to clients with timesheet evidence attached and send them off under the terms of your agreement with each client. The credit control function will be in the hands of your service provider but that is not to say you will have to wait for your money. You can access that immediately, net of VAT and the charge for that facility is identified when you negotiate the contract with your outsourcing specialist.
There is always the possibility of bad debt. You should have insurance in place to cover that; after all you will have received your invoice amount without the client having paid.
The secret behind outsourcing functions to an experienced company is having faith in its skills but also a reporting procedure so that you know what is going on at any time. Those reports should cover aspects such as gross sales, debtor accounts, profitability and cash received. You can expect money in your bank on a fixed day each week based upon the activity of the previous week.
There is a great deal of work here though much is a matter of simply pressing a button once the relevant data has been entered. It does involve accuracy and expertise with any problems resolved quickly. You should find you have more time to generate more business and that is where your energies should be focussed.
Setting up a recruitment agency requires more than just knowledge and experience of the industry. There are the practical issues that everyone faces when running a business and in recruitment nothing is more important than the payroll. It is something that can be taken out of your hands without the slightest of worries. You can see the details on a regular basis and the ‘taxman’ will never come calling.
If you have ever considered opening any kind of business, you have certainly considered the risks involved in such an undertaking (and the fact that you’re reading this signifies that you’re looking to cover those risks). There are many different concerns that a business owner could have, such as finding customers, raising capital, marketing and advertising, the business failing, and especially, the risk of something going wrong and causing damage. To cover the cost of those potential damages, you will need insurance.
There are many different kinds of insurance, such as:
Accident or Sickness insurance
Of these types of insurance, some are valuable to businesses and some are specific to individuals. Businesses can have auto insurance for their vehicles to cover costs in the event of an accident. Individuals can also have auto insurance for the same reason. However, life insurance is generally something that an individual purchases, and not a business.Most businesses will want to have the type of insurance called liability insurance. Liability is best defined as the state in which an entity is responsible for something. For instance, all kinds of debt are liabilities. A poorly maintained vehicle is also a liability, as is an employee who is unreliable. A company will want to have protection from liabilities in the form of insurance, thus saving the company money it will potentially have to spend out of pocket.
Most states require businesses to purchase insurance. However, the conditions surrounding the type of insurance, and whether or not the business is required to purchase it, vary based on many different factors. For instance, most businesses are required to carry Workers’ Compensation Insurance. This type of insurance protects employees from the costs of healthcare, if they are injured on the job. Some states also require employers to carry Disability insurance and/or Unemployment insurance.
A good example of a state mandated insurance policy is the California contractor license bonds program. This program states, that any contractor wishing to legally purvey its services in the state of California, must register a $12,500 bond with the state. The registration of this bond then permits the contractor to obtain a contractors license. The state of California states that “The bond is filed for the benefit of consumers who may be damaged as a result of defective construction or other license law violations, and for the benefit of employees who have not been paid wages that are due to them.”
As you can see, the purchase of insurance is highly valuable in controlling risk, thereby limiting liability in your business endeavors. It is considered so valuable that some states mandate purchasing it. Even for individual citizens, it is usually against the law to drive a vehicle without proper insurance. It is definitely a best business practice to purchase some form of liability insurance. It is better to be prepared for the unexpected than to suffer loss in the end, especially where you have used up a lot of money.