Tom, Your assertions below confuse agency regular pricing to the hiring company with pricing for payrolling. Payroll rates through agencies are much lower and they would still guarantee payment, and they are always, when analyzed, cheaper than using a factoring company. Also you are assuming corp to corp or 1099. They carry several costs not considered in your models that would need to be and there is also the issue of tax and co-employment compliance. It's gotten pretty complicated, Tom. My point is that because you are not actually in the business (you are a customer of the business) you are operating with limited information. This, of course leads to problems in comparing these things properly.
-----Original Message----- From: Tom Metro [mailto:[EMAIL PROTECTED] Sent: Wednesday, February 01, 2006 8:43 AM To: Larson Rider Cc: L-Perl-Jobs-Discuss Subject: Re: factoring services Larson Rider wrote: >> You don't necessarily need all the services (and costs) of an agency >> to solve that problem. There are companies that provide "invoice factoring" >> like services for contractors, where they handle the collection and >> smooth out the cash flow. Costs for such services are around 5%. > > 5%?! Wow, where did you find that? http://www.aquentfinancial.com/ > ...the lowest is 6% of the total receivable and you have to meet > minimums to get that low rate... According to: http://www.aquentfinancial.com/pricing.html their rates run from 2.5% to 20% depending on how long it takes the client to pay. > BTW, ALL of them have a contract clause to chargeback to you > [invoices considered] uncollectible. Correct, or at least that's true for Aquent. So in other words, services like this don't remove the risk of a non-paying client. They only smooth out cash flow (which is what I originally said). Aquent seems to have struggled with their business model over the years and frequently changes their terms. When they first started out they actually did assume the risk for invoices. I haven't used them in several years, and it looks like their policies have changed yet again. They now do business only with companies (consultants) billing $250K per year, which puts them out of the range of most consultants. > ...I think you are quoting hearsay or not fully investigated figures. I was quoting actual figures for services I personally used at one time. I haven't had a need for these services in several years, so I don't know what's currently available on the market. > For 1099 or corp. to corp. ... most are 11%... > Lowest W2 factoring I have found is 20%. Thanks for the updated figures. Still, for a consultant seeking to go it alone, those costs are still substantially lower than the alternative of using a full service agency, which you previously said will typically markup rates in the neighborhood of 50%. -Tom -- Tom Metro Venture Logic, Newton, MA, USA "Enterprise solutions through open source." Professional Profile: http://tmetro.venturelogic.com/
