Ever won a big contract only to worry about how you’ll pay workers before the client settles the invoice? Or worse - said no to a client because you felt you couldn't support their needs for contractors?
It’s a familiar problem for recruitment agencies. Contract workers need to be paid weekly or fortnightly. Clients often take 30, 60, even 90 days to pay.
The result? A cash-flow squeeze that stifles growth and puts pressure on your operations.
Payroll funding removes this stress. It gives you access to funds to cover payroll obligations upfront—so you can confidently grow, win new clients, and avoid turning down placements due to cash constraints. It gives you a competitive advantage from the start to scale and grow your business.
This post breaks down how payroll funding works, why it’s a smart financial strategy for agencies, and what to look for in a provider.
What Is Payroll Funding?
Put simply, payroll funding is a form of invoice finance tailored for the recruitment sector. It gives agencies the cash to pay contractors as soon as timesheets are approved—long before the client invoice is paid.
Here’s how it works:
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You place a worker and they submit timesheets.
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Once timesheet is approved, your payroll funding partner pays the worker.
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You invoice your client.
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When the client pays, the funding provider is repaid.
Think of it as a kind of cash advance that keeps your payroll running on time while smoothing out long invoice cycles.
Here's why Lauren Sharp of Sharp People uses Oncore as her back office support team:
Why Cash Flow Is a Critical Issue for Recruitment Agencies
The recruitment business model is front-loaded. You put in the work to secure the client and place the worker, but the payment can take months. That gap can stretch your working capital, especially if:
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You’re growing rapidly
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You win a major client with multiple placements
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Your contract workers are on weekly pay cycles
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You’re in a market with long payment terms (e.g. enterprise or government)
Stats to consider:
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The average debtor days in the recruitment sector is 44 days in Australia
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More than 60% of agencies report cash flow as a barrier to growth
Without funding in place, agencies often:
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Limit the number of contractors they can place
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Decline new business
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Delay internal investments like hiring or tech
The Strategic Benefits of Payroll Funding
1. Confident Growth
With guaranteed payroll coverage, you can scale without stress. Whether it's 5 or 50 contractors, you’ll have the funds to pay them on time.
📌 Read more about how to double your contractor placements - Cash flow no longer restricts how many roles you can fill.
2. Pitch to Bigger Clients
Enterprise clients often have long procurement cycles and net 60–90-day terms. With payroll funding, you can bid for their business without worrying about how to float the payroll.
📌 Looking for more clients? Check this article – funding lets you pursue bigger wins.
3. Pay Workers On Time, Every Time
Workers expect to be paid reliably. A single missed payroll can damage your reputation. Payroll funding ensures payments land as expected—every time there's an approved timesheet.
Want to hear from one of our contractors? Here's an interview with Matt Pepper, Senior Business Analyst
4. Protect Your Reputation
Late payments don’t just upset workers—they risk your brand with clients. Consistent, professional payroll processes strengthen your credibility.
What Else Comes with Payroll Funding?
Great payroll funding solutions go beyond the cash. Look for integrated services that support your entire back office:
✔️ Payroll Tax ComplianceMany providers handle all associated payroll tax calculations and payments, reducing the risk of underpayment penalties or compliance errors.
✔️ Integrated Timesheeting and Invoicing
Best-in-class solutions integrate timesheet management, payroll, and client invoicing into a single workflow—saving hours of admin each week.
✔️ Reporting and Reconciliation
Access real-time dashboards and reports to keep track of disbursements, margins, and payments.
What to Look for in a Payroll Funding Partner
Not all providers are created equal. Here’s what to consider:
1. Industry Expertise
Choose a partner that understands the recruitment model—particularly the contractor market. Experience matters.
2. Seamless Tech Integration
Look for platforms that integrate with your current VMS or back-office software. If you use systems like Upplft, JobAdder or Bullhorn, your funding partner should work in sync.
3. Transparent Pricing
You should know exactly what you’re paying for. Steer clear of providers with hidden fees, confusing terms, or lock-in contracts.
4. Scalability
As you grow, your funding needs will too. Ensure your provider can scale with you, whether you're placing 10 or 200 contractors.
5. Strong Track Record
Ask about:
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NPS scores
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Contractor satisfaction rates
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Missed pay run history
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Processing volume
📌 Oncore’s proof points:
Why Oncore?
We’ve been supporting recruitment agencies for over 25 years with fully managed payroll and funding solutions. Our platform is designed for agencies who want to scale, stay compliant, and reduce admin—without taking on debt or giving up equity.
Whether you're placing contractors in IT, healthcare, construction or professional services, Oncore gives you the funding confidence to grow.
A Smarter Way to Fund Growth
Cash flow shouldn’t be the reason you say no to a new client. Payroll funding frees you to focus on what you do best—placing talent and growing your business.
With the right partner, you’ll gain financial flexibility, operational efficiency, and peace of mind.
👉 Contact Oncore today to explore how payroll funding could work for your agency.