Categories: Blog


Andy Cagle


Staffing and consulting agencies sometimes have difficulty generating enough cash to fund payroll, cover taxes, and pay workers’ compensation insurance. While traditional financing is often where businesses turn first for a boost in working capital, many agencies find the rigid lending criteria and arduous application process unsuitable or impossible to overcome. These barriers to funding frequently either disqualify small and medium-sized agencies or delay the time to fund. 

Factoring unbilled receivables is a type of accounts receivable financing that offers staffing and consulting agencies the opportunity to unlock and quickly access debt-free liquidity by bridging the gap between delivery of and payment for agency services.

What Are Unbilled Receivables?

Unbilled receivables, frequently referred to as unbilled accounts receivable (AR), represent recognized revenue for work or services that have been completed but not yet invoiced. Some unbilled receivables, such as timesheets, are of particular importance to staffing and consulting agencies, where billing frequently occurs after services have been rendered. 

Why Factor Unbilled Receivables?

For the vast majority of business owners, waiting to get paid can result in unstable cash flow, making it difficult to forecast a company’s ability to cover operational expenses and pursue growth initiatives. Flexibility, speed of funding, and a low barrier to entry make factoring unbilled receivables an attractive solution. Whether your agency is concentrating on growth or focused on covering operational expenses — factoring unbilled receivables can quickly increase cash on hand and smooth out cash flow.

How Are Unbilled Receivables Factored?

Unbilled receivables are factored using time cards and pro forma invoices on earned revenue. The invoice financing / factoring company will provide funding as if the pro forma invoices were billed receivables. Rather than waiting the weeks or months that it can take to get paid for your completed services, you can instead submit these unbilled earned receivables for instant access to working capital without adding debt to your agency’s balance sheet.

Choosing The Right Company To Factor Your Receivables

Invoice financing / factoring companies can differ in substantial and consequential ways. For example, some alternative lenders will exclusively advance capital for billed receivables, limiting access to liquidity and, presumably, opportunity. Some may also provide more favorable advance rates (percentage of your invoice they will advance) for billed versus unbilled receivables, resulting in a higher cost of capital for your business. Another consideration should be the alternative lender’s experience working with staffing and consulting agencies to meet their particular funding requirements.

We recommend identifying your agency’s liquidity needs, doing some research, and reaching out to alternative finance companies, such as LSQ, for additional education and to understand their terms and requirements in more detail.

Factoring Unbilled Receivables With LSQ

For more than 25 years, staffing and consulting agencies of all sizes and stages of growth have favored LSQ’s funding services. They have long represented a significant percentage of our client portfolio, and we have purposefully evolved our funding solutions to suit their working capital needs better.

Our most popular benefits and features include:

  • Some of the best pricing in our industry
  • Low barrier to entry with fast funding
  • Factoring of both billed and unbilled receivables
  • Identical advance rates for billed and unbilled receivables
  • A mobile-friendly AR funding platform, LSQ FastTrack®, that ingests invoice and time card data

Our team is familiar with agencies’ unique needs, and we welcome you to learn more about LSQ if your business is interested in increasing capital without taking on additional debt. To learn more about how LSQ helps businesses simplify access to working capital, visit

Or, if you are ready to have a conversation, visit

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