For most recruitment directors, the accounts and finance function within their business is often an afterthought, mainly as they focus on filling vacancies and getting their team to make more placements. Also, most recruitment directors are often unaware of how their back-office processes are done and, therefore, do not take the time to review whether they are being done efficiently.
There are some agencies where the Directors do most of the back-office processes themselves, such as invoicing, payments, credit control and, in some cases, even bookkeeping. This is a waste of a director’s valuable time, which should be better spent on making more placements and looking to outsource these functions to a back-office company.
Some agencies will employ one person internally to look after the finance administration for the business, and this person will wear multiple hats, including invoicing clerk, credit controller, purchase ledger clerk and bookkeeper. However, this can be dangerous if all the company knowledge is in one person’s head, especially during sickness, holidays, or if they leave the business. They may also have limited knowledge of multiple aspects instead of being completely proficient in all.
Some larger agencies will look to employ a back-office and finance team (including an internal accountant) to feel like they have greater control over the company’s finances as it is being done in their office. This can be a very expensive cost to the business, and the director might still not have a good grasp as to whether the people in place are doing their jobs correctly and efficiently.
There are several smarter options for a recruitment agency to consider improving the cost and time efficiency of their back-office and finance departments, which are available on the market. Most of these revolve around outsourcing the processes to either onshore or offshore back-office companies.
These companies could take on some or all the back-office functions handled by an internal team while maintaining the agency’s identity. Most can also provide quality and efficient software to complete the task and provide continuity of service, which means no downtime.
Many of the outsourcing companies will also have a wide variety of experts internally to provide help with compliance, accountancy, back-office functions, legal, marketing and finance, which avoids the agency having to source these expensive individuals for their own business.
Mayachi Ltd has over 20 years of experience within the back-office and accountancy aspect of recruitment companies and can provide help and advice on how to structure this within an agency. Mayachi will be looking at the current back-office set-up and providing improvements to processes and software used or alternatively looking at whether outsourcing is a better option for some or all the functions being dealt with internally.
