With so many changes in how people work and how companies operate and run their staffing businesses in recent months, I expect agencies to concentrate even more on consolidating and streamlining their processes. To put it another way, staffing agencies should look to decrease the amount of software products and vendors with whom they must collaborate in order to focus on getting employees out the door and invoice clients for their services.
I’m still shocked at the number of staffing companies who don’t use the built-in capability of running their own payroll, in-house. Especially if you have software that offers that ability, as COATS Staffing Software does. Understandably, software can be complicated and can drill down farther than busy Recruiters have time to worry about. They just want to use the basics, start their employee and satisfy their customer.
There are always tools and applications in every software product that won’t be used. But, if you have the employee and client data already input on the front end, why not use the back office to complete payroll and billing? Subbing this out to another payroll firm is an additional and costly step.
Additionally, if staffing firms aren’t yet working with some form of electronic payment and e-mailing rather than printing and mailing invoices, they are adding unnecessary operational tasks. A recent article published by Smith.ai regarding online payment and billing solutions for the staffing industry noted “the ability to accept payments and invoice clients online is liberating. You can instantly send invoices and see real-time payments as client remittances hit your bank account. It also reduces paperwork, manual labor, and time spent on administrative tasks.”
Smith also notes, “However, online payment and billing solutions come in different shapes and sizes.You’ll find some that are basically online bill pay services, while others are full-fledged business management suites that combine online payment and billing capabilities with CRM functionality. Both are valuable options, but they are not the same, nor do they serve the same needs.” Duly noted, COATS Staffing Software falls into the latter category of being a full-fledged business management suite complete with payroll, billing, GL, A/R, A/P, a CRM and an ATS.
I know, I know. You’re going to need a full time Bookkeeper or Payroll experienced employee, but don’t you want the control and ability to access and modify payroll and invoices whenever needed? And, quickly? Because employees expect to be paid promptly and clients don’t appreciate invoices or statements with errors.
I can’t tell you the number of additional payrolls we ran as a staffing agency owner, every single week. If your temporary employees aren’t happy, neither are the clients calling on their behalf to help them get paid correctly so they can return to work. Get your employee back to the role you assigned them to help your client out, rather than having both worry about pay.
Software Solutions for the Staffing and Recruiting Industry
We speak with countless owners and bookkeepers who use one program for their front office, and a completely separate software for their back office. Or worse, they contract this work out. How can you effectively manage thousands of employees, job candidates, clients and prospects with several software systems or subcontractors? Duplicate data entry is the last thing any staff member should spend time on right now and if you’re using Quickbooks, it wasn’t made for the staffing industry.
There are a lot of facets to running a staffing agency smoothly, not the least of which is making sure that cashflow in is always able to keep up with cashflow out. Good accounting software keeps the process on track by being fully integrated across Accounts Payable, Payroll and Accounts Receivable, among other departments.
This means that client information, employees, and job orders are automatically tracked once they are entered into the system—no need for redundant entries, which can result in lost time and potential errors. And the information is updated in real-time for all to see and utilize in a fully integrated staffing software.
For your Accounting Department, a full-featured, customizable General Ledger is a valuable resource for creating and generating financial reports, without needing additional database software. Once the templates are customized to your specifications, the data is automatically populated, again reducing the potential for errors. Not all staffing software firms offer a General Ledger or even a back office capability, in one system. In fact, very few software companies include a GL in their base package. Allowing your office to benefit from the ability to operate within one interface that is comprehensive and secure, is worth more than you realize.
Because it was designed over twenty-five years ago by a staffing company owner who couldn't find an all-encompassing program to operate their business, COATS is uniquely specific to staffing and hiring. A custom software solution was developed specifically for staffing firms. Not to mention, we take all the suggestions, requests, custom reporting and programming and incorporate the best and universal ideas into the system when it benefits all. Job posting, remote hiring tools, employee and client management, payroll and accounting requirements are completely managed and directed within this software.
The Benefits of Proper Staffing Software Solutions
A well-blended single application where infrastructure, data and processes all come together in one clear enterprise can be absolute heaven for a staffing agency. Only having to access a single software program saves countless steps. This can’t happen with fragmented systems and multiple software packages.
This is what I keep going back to, if you have access to a single software system that can handle your entire process of hiring, paying and billing - why wouldn’t you use one source vs. multiple applications or vendors? Granted, you do have to set it up properly and have an efficient employee to handle payroll, but this is a one-time process which will garner you years of service. In running our staffing firm, we hired multiple Recruiters through the years, unlike Bookkeepers. There was effectively no turnover in this role.
There are so many different software packages available for staffing agencies to consider. It’s a daunting task to research, review and consider which one to select. At the core, a staffing owner needs to consider if the software is a full service, front and back office software that can take their employee from assignment to paycheck and their client from job order to invoice.
In researching complete office automation for hiring companies, I found a publication that listed the top ten solutions for staffing firms. XENA MENSINK recently published an article sharing The Top 10 Online Payment & Billing Solutions for Hiring & Staffing Companies and had this to say about COATS Staffing Software:
For staffing and recruiting agencies looking for a bit more granularity in the tools they purchase, COATS offers payroll software (as well as additional modules that can be combined to create a more robust solution). COATS provides full payroll capabilities, including paying and billing, pay cards, direct deposit, and time & attendance.
In addition, you can also make use of ACA billing capabilities, invoice volume discounts, PDF invoicing and statements, bank reconciliation, and other important features. There is also a general ledger module that builds on these capabilities. Other things to know about COATS include:
- Free option? No
- Price: Custom
- Full payroll capabilities
- Invoice volume discounts
- Invoice time sheet attachment
- PDF invoicing/statements
- Time and attendance
I asked Karen Connor, COATS Staffing Software - Owner, about the listing in the top 10 online payment and billing solutions specifically for the staffing industry and she shared that COATS also includes the following:
- In-depth reporting
- Full candidate tracking system
- Full ATS and recruiting CRM capabilities
- Designate your desired funding company as “remit to”
- Invoice clients individually or in bulk
- Alter billing rates as needed
- Send multiple invoices at once
Many staffing software packages do not include a general ledger and without one, it’s difficult to determine your company’s success. You need a GL to access your profit and loss statement. After attending many American Staffing Association trade shows over the years, our clients shared they definitely needed to have a general ledger. There are so many reports that are available when your software company incorporates a GL into the software for your firm to utilize.
I can tell you from experience while operating a staffing agency, the variety of financial statements that are available to print within a good software system. Some of those reports include a Trial Balance, Profit and Loss Statement, multi P/L Statement, Statement of Owner’s Equity, Balance Sheet, Cash Flow report, history of GJ Transactions, Transaction by Date, history of Out of Balance Transactions, history of all Transactions with Accounts Missing, Individual T Account reports for each account, and the Chart of Accounts.
Creating a Profit and Loss Statement
A profit and loss statement alone, from the list above, is critical for a company's decision-making process. It demonstrates whether the company's operations result in a profit or a loss after all connected expenses have been taken into consideration.
When reviewing the profit and loss statement you can look, for example, to see if gross profit is down. If so, of course your action should be to increase your sales. You need to focus on obtaining additional clients and getting more employees out the door to work. However, if gross profit has remained consistent but net profit is down, that signifies an increase in operating expenses, so you’ll want to start looking at ways to cut expenses.
The Profit & Loss screen built into your software system will show your company's revenue and expenses for a specified time period. The profit or loss of your agency for the given time is found in this report. Your overall profit is calculated using the accounting formula income minus expenses. The user can view transaction information, change transactions (when permission is provided), and print the Profit & Loss Report from the P&L screen.
A profit and loss statement, like a cash flow statement, gives you specific information about your company's revenues and expenses. Even a simple profit and loss statement, often known as an income statement in accounting terminology, can offer you a convenient window through which you can observe your company's revenue and expenses. Additionally, profit and loss statements can be used to create a budget or calculate your working capital.
Your staffing agency’s P&L and balance sheet are two of three main reports created each fiscal year. The Profit and Loss includes all of your income such as sales from direct hire placements, temporary placements and other income producing events and all of your expenses such as temporary wages, advertising, taxes, dues & subscriptions, rent, staff wages, worker’s compensation and more.
While a profit and loss report is beneficial, comparing them by using different time periods, can be even more helpful. A good staffing software will offer a comparative P/L as well, along with the percentage of increase or decrease from measuring during the two time periods. Staffing agencies can then see if sales are up or down from the same time period last year or last quarter, or month. They can also review if expenses are higher and if so, can pinpoint where. Did Recruiters spend 50% more in advertising or drug screens last month or is your computer tech support increase resulting in a need to research competitive services?
The balance sheet includes assets like cash and certain equipment and buildings; current and long-term liabilities such as accounts payable; and owner's capital. The balance sheet balances out when the assets, liabilities and equity all add up correctly. To ensure that your P&L statement and balance sheet are balanced, staffing owners or accounting staff should review all of the account balances carefully at the end of the reporting period.
Creating a Budget
The ability to create a budget is also a useful tool for staffing agencies, or any business, to utilize. And, the budget can be created for multiple years. This allows the user to chart their finances. You can find your budgeted amount, actual amount spent and the delta to track expenses. A budget screen allows the user to create a budget for multiple years. This allows each staffing agency to chart their finances. COATS offers the ability to create a budget for all staffing clients, integrated within the software. Each user can either start by entering in amounts in the budget column or they can have COATS create a starting point by clicking the “Adjust Income Budget to 90% of Actual and/or Adjust Expense Budget to 110% of Actual.”
Your budget can be established for each staffing agency branch as well as for all branches combined. It can also be broken down into quarters and will show the budget per month with actual spend and total for each quarter.
Staffing firms that use technology should be able to make data-driven decisions with the assurance that everyone is working from a single source of financial truth. It is too difficult to have your firm operate efficiently when you have to use several different software packages towards one goal of paying and billing your employees and clients.
You should use the minimum amount of manual tasks to prepare paychecks and invoices every week, allowing you to scale your business and work on cash flow. Not to mention, most staffing agencies operate several branches in different states with different tax jurisdictions and more than one legal entity. With a multi-branch and multi-state software, you are able to aggregate transactions and activities across your entire business.
Recruiting and Staffing Software Solutions For Your Business
With COATS Staffing Software as your payroll software and billing system, you will have fewer tasks and data entry strokes to complete with our fully integrated CRM, HRIS, payroll, accounts payable and accounts receivable, among other departments.
As companies have core issues of their business to concern themselves with that unfortunately expand each year, the basic task of payroll and billing should be the least of their concerns. The new vaccine or test mandate after the years of software and calculations needed to comply with the Affordable Care Act, will and have had a huge impact on the staffing industry. This is why I see a continued emphasis in staffing owners looking for a simplified hiring software product that truly is an all-in-one solution for their core business.