We we’re contacted by a construction sector recruitment agency, founded by an experienced recruiter with 8 years in the industry. As a startup, the agency needed a risk-free financial model that could ensure steady growth while navigating the common cash flow challenges faced by construction agencies, especially those lacking Gross CIS Tax Status.
Without Gross CIS Tax Status, construction recruitment agencies are often subject to significant cash flow constraints. Typically, when invoicing clients, 20% of the total invoice is withheld as CIS tax, leaving the agency with only 80% of the invoiced amount. This can severely limit the ability to scale operations, pay contractors, and reinvest in business growth.
To circumvent these financial challenges, the agency partnered with Recruitment Funding Solutions (RFS) and chose our RFS Protect product. By operating under RFS’s Gross Payment Status, the agency was able to avoid cash flow interruptions and focus on expanding its business.
RFS Protect provided the agency with comprehensive back-office support, which included payroll management, credit control, invoicing, and overall administration. This allowed the agency to focus on acquiring new clients and contractors without worrying about financial management. The bundled package, with no setup costs or minimum monthly fees, offered the flexibility the agency needed to grow without the pressure of meeting minimum payments.
In just 8 months, the agency saw significant growth, expanding from 0 to 60 temporary workers per week. Their weekly turnover increased to £70,000, while the agency’s margin reached £3,800 per week. All payroll, invoicing, and credit control tasks were seamlessly managed by RFS, freeing the agency to focus on business development.
As the agency continues to grow, they have the option to apply for their own Gross CIS Tax Status, should they choose to do so, but for now, the agency remains content with the benefits provided by RFS Protect.
Risk free model:
Cash flow safeguarded by operating under RFS’s Gross Payment Status
Back-Office Support:
Full administration of payroll, invoicing, and credit control
Scalable Growth:
Grew from 0 to 60 temps per week and achieved £3,800 weekly margins
Flexibility:
No setup costs or minimum monthly fees, allowing the agency to grow at its own pace
Future-proof:
Option to apply for Gross CIS Tax Status as turnover increases
