The margin is 6%. Clients take 55 days to pay.
A staffing company is effectively a lender to its clients: it pays workers and statutory dues every month and waits for clients to pay. On thin margins, a few extra days of credit or one missed statutory payment can turn a profitable contract into a loss, or a penalty.
An HR services client describes what having a finance team behind them meant:
Soatech is perfect for a company like ours that doesn’t have an in-house Accountant / CFO. They are very professional and do things in a timely matter. They always get right back to you with an answer to your question.
Quoted word for word from our clients. Some quotes use our former name, Soatech.
Follow ₹40 crore of billing through a typical staffing company
Here is the cash cycle of an illustrative manpower supply company:
At ₹40 crore of sales a year, 70 days means about ₹7.7 crore is permanently tied up in the cycle. That is what your bank limit and your own capital are really funding. Get clients to pay 15 days sooner and about ₹1.6 crore comes back, with no new loan and no new customer.
Illustrative composite figures, not a client's. Your own cycle comes straight from your balance sheet: stock, receivables and payables, each divided by a day's sales or purchases.
Six money problems specific to staffing
Payroll before payment
Salaries and statutory dues leave on fixed dates; client payments don't. We forecast the funding gap weekly and arrange the right limit.
Statutory liability
PF, ESI, professional tax and labour welfare contributions must be correct and on time for every worker. We track them and keep proof for clients.
Thin margins
A 6% margin disappears with a few extra days of credit. We show margin by client after finance cost.
GST on manpower supply
GST rules and invoicing for manpower services need care. We keep returns and credits right.
Client concentration
One large client can be half the business. We track concentration and plan for the risk.
Contract terms
Mark-ups, statutory reimbursements and payment terms vary by client. We review contracts so you're paid for everything you carry.
Want a CFO to look at your numbers?
A senior CFO reviews your figures with you and shows you where to improve. No cost, no obligation.
How we strengthen a staffing company's finances
A weekly payroll funding forecast
Salaries, PF, ESI and taxes against client receipts.
Margin by client
After statutory cost, finance cost and admin.
A statutory compliance tracker
Every contribution, every month, with proof.
Receivables discipline
Invoices on time, follow-ups by client, escalation for the slow ones.
Contract review
Mark-ups and reimbursements that cover what you carry.
Check your own numbers
Build a 13-week payroll funding view:
Ask CFOAvatar about your staffing business
What clients say
Some of the businesses we work with.
Soatech has been an excellent partner to ideasurge for the last five years as our one-stop shop managing Accounts, Audit and Payroll. In addition, they have been instrumental in coordinating with a prior accounting firm and getting us up to date with all regulatory and statutory needs. Soatech now seamlessly operates as an extension of ideasurge for all Finance functions.
Before CFOSurge came into the picture, our business lacked financial discipline. Once their team started overseeing our finances, everything fell into place. There was accountability and when you know someone is keeping track, you ensure things get done properly. It’s been three years and the systems they put in place are still working well. Our business is in a much better position today.
Quoted word for word from our clients. Some quotes use our former name, Soatech.
Questions owners ask us
How should a staffing company fund payroll?
With a weekly forecast of salaries and statutory dues against expected client receipts, a working-capital limit sized to the gap, and invoices raised and followed up on fixed dates.
What happens if PF or ESI is paid late?
Interest and damages can apply, and clients may withhold payment until you show compliance. Tracking every contribution monthly prevents both.
Can you review our client contracts?
Yes. We check mark-ups, statutory reimbursements and payment terms, and model the margin each contract really earns.
