RECRUITMENT
A Selective Solution to doubling turnover
Company: Selective Solutions
Product: Scottish Pacific Invoice Discounting

Specific business needs
• Working capital
• Funding for expansion through acquisitions
• Flexible funding
• Powerful ledger management system

Selective Solutions started trading in July 1999 and has increased turnover from 0 to $25 million per year in just four years.

It provides general recruitment services and is particularly active in blue-collar labour hire and hospitality, recruiting for hotels, restaurants, special events and clubs.

Labour hire is traditionally an excellent industry for cashflow finance given firms have to pay their contractors within seven days while debtor/customer payments tend to be received within 45 days. An Invoice Discounting facility provides the finance to cover this lag.

For the first three years, co-owners Jacob Tarszisz and Terry James funded the business out of retained reserves, juggling seasonal spikes such as quarterly superannuation and GST payments.

It was only when the pair needed finance to purchase two new businesses worth about $700,000 that they approached Scottish Pacific Business Finance for an Invoice Discounting Facility.

The facility enabled Selective Solutions to expand dramatically. Within a year of taking out the facility, turnover nearly doubled to about $25 million per year.

Selective Solutions now places 1200 staff a day and has an office in Sydney, three offices in Melbourne and is about to open another office in the Sydney suburb of Parramatta

"The business we are in has no hard-core assets and doesn’t lend itself to any other form of finance," said Jacob. "Our greatest asset is our debtors and assigning our invoices to Scottish Pacific has been one of the best decisions we have made.

"Initially, I only wanted a facility for $500,000 but I have to thank Brendan Green (Scottish Pacific’s NSW Business Manager) for insisting I take out a facility for $2 million."

Terry agreed: "As you only pay for what you use on this facility, it has proved perfect for funding strong expansion and providing peace of mind during seasonal spikes such as GST and superannuation.

"If we need the money for expansion, new purchases or for seasonal cash crunches, it is there. That increases our efficiency and better positions us to take advantage of opportunities as they arise."

Jacob, a chartered accountant by trade, said Scottish Pacific’s online accounting system, "Open Account", was brilliant and allowed him to plan the company’s cashflow 24 hours a day.

"If you are greedy for information, you can go in 10 times a day and draw down or set up reports and find out what your accounts are doing on the day. It is so time saving with sending debtors notices and invoices.

"The reporting system is a piece of cake and now you can draw down until 4pm. I balance on a Saturday and can do all my draw downs for the next week, even though the funds aren’t available until Monday night."