By Jim Ackerman, Billtrust Sr. Sales Executive
For much of my early career in sales, I was tasked with selling services to some of the largest, most successful staffing firms in North America. In order to be effective, I spent much of my time learning about the challenges that staffing firm employees face daily, whether they’re front-line recruiters or executives.
Most financial leaders within large staffing companies agree that cash flow is the best way to measure the health of a firm. As staffing firms grow, their operational challenges related to cash tend to become larger and more diverse. As such, the technology supporting day-to-day activities needs to accommodate more complex customer billing and payment demands.
An industry veteran will tell you that the staffing industry is highly commoditized. Instead of selling services and developing personal relationships, the popularity of vendor management systems (VMS) within the Fortune 1000 has resulted in a shift to product-focused sales.
Standing out from the crowd
Many staffing leaders have complained to me over the years about the slow departure of the personal relationship between the staffing account manager and hiring manager in favor of an automated, but less personable submission of candidate resumes and skills to an online self-service portal.
How can any firm differentiate itself from the pack when personal relationships don’t exist? It’s a sheer volume game. The person who submits the most volume of candidates can win more than the rest.
This is not an article lamenting the rise of VMS automation. I’ll leave that to others. Instead, I’m suggesting there are ways for mid-to-large staffing companies to leverage technology to stand out from the crowd in two dimensions: cash flow and customer experience.
While automation has taken over a large piece of the firm-to-candidate customer lifecycle, it hasn’t been leveraged to streamline the rest of the revenue lifecycle. In many cases, weekly billing cycles have become the most frequent touchpoints between staffing firms and their larger customers. However, the communication leaves a lot to be desired. Instead of a streamlined and focused customer experience, staffing billing processes are full of slow, manual, and frustratingly inaccurate interactions.
What problems bring the pain?
First of all, staffing firms are forced to deal with Vendor Management Systems (VMS) Portals, which are essentially AP Portals. More companies are asking staffing firms to feed their invoices into them. But different companies may use different portals, each with its own requirements.
That often means staffing companies are paying by the employee and using week-ending dates rather than by using the staffing firm’s invoice numbers. The outcome: a lot of the cash application process becomes extremely manual…and extremely time-consuming.
These manual cash application processes mean FTEs can’t work on high-value tasks. And if there was ever a recipe for human error, it's manual processes. After all, these involve making people perform repetitive keystroking tasks.
Streamlining the staffing firm O2C process
The time has come for staffing firms to focus on streamlining the back end of the order-to-cash process with an eye toward improving firm financials and customer experience. In order to effectively do this, each firm needs to take a segmented approach to strategy.
Ask any employee in an AR department at a mid-sized staffing company, and they will tell you that getting an invoice paid from a Fortune 1000 requires a completely different accounts receivable (AR) workflow than does a small business customer. If your firm is going to successfully optimize your invoice-to-cash process, you need to use a technology that accommodates all types of customers and their varied invoicing and payment needs.
What framework should staffing firms use in adopting the right technology solution? We will dig into that in my next article.
Check out Part 2 of Jim's blog series: A Technology Framework for Staffing Firms.