Recruitment Agencies Unpaid Invoices: Time to Collect

30th January 2020

Recruitment Agencies Unpaid Invoices: Time to Collect – The recruitment industry is one of the leading industries in the UK with consistent growth since 2010. The number of recruitment businesses has an average year on year growth of 21% and the industry as a whole is worth over £35 billion.

However, receiving payment for their services seems to be an ongoing problem for many recruitment agencies.

Recruitment Agencies Unpaid Invoices – Collecting debts whilst maintaining relationships

We work with many Recruitment companies throughout the UK, helping them to recover their outstanding invoices. One of our recent collections was on behalf of an SME owner who was owed more than £12,000 from a client who refused to make payment for the ‘finders fee’ after they offered full-time contracts to several employees they had originally hired on a temporary basis.

The owner was initially hesitant about involving a third party to help recover his money as he did not want to ruin the relationship he had with his client, but DCBL protects client relationships. Nonetheless, with limited cash flow and the pressure of paying overhead costs, they had little choice and made the call.

Upon instructing DCBL the owner expressed the importance of maintaining a relationship with the debtor. We were able to adapt our recovery methods to achieve this and within a matter of weeks, we recouped the balance in full without damaging their working relationship.

Three main reasons why recruitment agencies struggle to get their invoices paid:

• An employee hired on a temporary basis is given a permanent position. Some employers do not foresee the fee from the recruitment agency or have not read the terms in depth.
• The employer hires the applicant for a position within their company that is different to the one the CV was initially intended for.
• The applicant leaves their position within the company while still in the rebate period, however, the employer has violated the terms and conditions, invalidating their right to replace the applicant.

During all of the above situations, if the debtor refuses to pay the recruitment agency this can have serious consequences on their company as a whole, particularly smaller agencies who will struggle with their cash flow being held up.

If you are struggling to recover the money you are rightfully owed from clients who are refusing to pay. Contact us today for a free consultation. Our client portfolio ranges from Blue chip companies to Sole traders to Private individuals so whatever the size of your business; we can help.