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One of the main concerns for agencies is having the funds and processes in place to pay your workers every week as well as making sure all payroll processes are 100% compliant with current law.

Subject to credit terms set between you and your end client, this can leave you 30+ days before invoices are paid – so you how do you bridge the gap? Read on to find out more about funding and payroll processing.  



Most start-ups seek funding early on. Even when self-funding is available, it is generally not sustainable, especially in the temporary recruitment sector where businesses are required to invoice and make payroll on a weekly basis. 

Temporary recruitment agencies in particular can suffer a short fall when payroll commitments dictate they pay recruitment staff before clients have paid their invoices. This has a huge impact on cashflow, the lifeblood of any business. 

A cost effective solution that allows you 100% of your funding on a weekly basis, full debt insurance and a transparent fee can set you up for the most successful agency launch and beyond. 

As a start-up agency you may want to consider a system offering a full back office and funding solution. Choosing software that streamlines and automates your main administrative processes will save you time and money and help keep you compliant.

A fully integrated package that provides payroll services and funding solutions can lessen the stress of starting a business with high administration demands and provide you with the reassurance and financial support to grow. 

Consider building your new business around software and services that offer: 

  • Customisable electronic timesheets 
  • Invoice production and despatch 
  • Contract management 
  • Payroll processing 
  • Management reporting 
  • Credit control 
  • Compliance



The payroll process overall manages employees’ salaries, including everything from holiday pay to sick pay. You must pay your employees the right amount they are owed, at the right time according to their contract and the current employment laws (i.e. minimum wage). You also are required by law to deduct any tax and pension from the pay before you send it out. 

In order to process payroll correctly, you must stay up to date on compliance and employment laws. Here are some points worth remembering; 

  • You must record employees’ National Insurance (NI) and tax, plus report it online under the Real Time Information (RTI) PAYE system 
  • Your deductions and payments must be accurate 
  • You need to provide each employee with a detailed payslip 
  • You must keep payroll records for a minimum of three years 
  • You need to pay other deductions such as pension accordingly 

It’s also important that annually, you report to HMRC on the previous tax year (which ends on 5th April) and give your employees a P60. 


Understanding payroll as a small agency


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