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Staffing payment index rises sharply

November 05 2008

The speed at which buyers of staffing services pay staffing firms accelerated sharply in October, according to the Capital TempFunds credit index. The index rose to a reading of 116 in October, up nine points from September's reading of 105.

"As the Capital TempFunds Credit Index shows with its upticks for the last three months, collections are trending better because staffing companies are beefing up the accounts receivable collection departments and focusing more on collections," said Jim Rothman, president of Capital TempFunds. "We also note that staffing companies are increasingly reluctant to allow customers to take 60 to 90 days to pay in this environment. One of the implications of this smart move in credit policy is that high risk account debtors are being limited. Therefore, staffing companies have decided they must collect faster or stop servicing those higher-risk accounts."

Data for the index comes from Capital TempFunds' clients across the country and allows firms to gauge how long their customer base is taking to pay compared with others'. The higher the index number, the faster staffing buyers are paying. The index has a base line of 100.

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