In recruiting, the gap between “great candidate placed” and “fee in the bank” is where money quietly disappears. A placement that never got invoiced. A rebate window everyone forgot about. A temp contract that should have been re-billed weekly. The work was done; the revenue leaked. Tightening the path from placement to payment is one of the highest-leverage things a recruiting agency can do.
Here’s how the pieces fit — fee models, when to invoice, the clauses that affect billing, and where revenue tends to leak.
Fee percentages and terms below are illustrative. Your actual fees, guarantees, and rebate terms live in your client agreements.
Recruiting fee models (and how each gets billed)
Your fee model determines when and what you invoice:
- Contingency. You’re paid only on a successful placement — typically a percentage of the candidate’s first-year salary. You invoice after the placement (often on start date). Most common in perm recruiting.
- Retained. The client pays in stages — e.g., a portion up front, on shortlist, and on placement. You invoice at each milestone. Common for executive/senior search.
- Temp / contract. You bill recurring against hours worked (often weekly), usually as a markup over the contractor’s pay rate. Cash flow and accuracy depend on clean timesheet-to-invoice flow.
Mixing models across clients is normal — which is exactly why a clear system matters.
Tracking the pipeline from first call to placed candidate
You can’t invoice what you didn’t track. A recruiting pipeline worth billing off of captures, per role:
- Open roles and their fee terms
- Candidates in process per role (sourced → submitted → interviewing → offer)
- Placements (accepted offer, start date, agreed fee)
- Invoiced and paid status
The two columns agencies most often lose money in are the seams: a placement that never becomes an invoice, and an invoice that never gets chased to paid.
When to invoice — and what to reference
- Contingency: invoice on the candidate’s start date (or per your terms). Reference the role, candidate, agreed fee %, and the salary basis.
- Retained: invoice each milestone as it’s hit, referencing the stage.
- Temp/contract: invoice on your billing cycle from approved timesheets, referencing the period and hours.
Every invoice should tie back to the placement record so there’s no ambiguity if a client queries it.
Rebate and guarantee clauses (and how they affect billing)
Most perm placements carry a guarantee/rebate period — if the candidate leaves within a set window (e.g., 90 days), you owe the client a partial/full rebate or a free replacement. For billing, that means:
- Track the guarantee window on every placement, with its end date.
- Don’t treat fees as fully “earned” until the window closes — a clawback is real revenue risk.
- Handle replacements cleanly — a replacement search shouldn’t quietly become unpaid work.
Where revenue leaks (and how to plug it)
- Untracked placements — a deal closed by email that never made it into the system, so it never got invoiced.
- Missed temp re-bills — a weekly contract that didn’t get billed every week.
- Forgotten milestones — a retained stage hit but not invoiced.
- Unmonitored guarantee windows — fees booked as earned that later get clawed back.
- Slow collections — invoices sent but never chased (see How to Get Clients to Pay On Time).
Each leak comes from the same root cause: placements, invoices, and payments living in separate places. Tie them together and the leaks close.
Spreadsheets vs. a system that ties placements to invoices
A spreadsheet can track a pipeline. What it can’t do well is connect a placement to an invoice to a payment, watch guarantee windows, and tell you what’s billable right now. Once you’re running multiple roles and fee models, that disconnect is where the revenue goes. A system that links placement → invoice → payment makes billable work impossible to forget. (See our solutions overview.)
Where VexOps fits
VexOps for recruiting agencies keeps candidates, placements, and client invoicing connected end to end — so every placement turns into an invoice and every invoice gets followed to paid. Flat $49/month, launching Q2 2026 (we’re pre-launch today).
FAQ
When does a recruiting agency invoice the client? It depends on the fee model: contingency on placement/start date, retained at each milestone, and temp/contract on a recurring cycle from approved timesheets.
What is a rebate or guarantee period? A window after a perm placement during which, if the candidate leaves, you owe a rebate or a free replacement. Track it on every placement and don’t treat the fee as fully earned until it closes.
How do recruiting agencies lose revenue on billing? Mostly through seams — untracked placements, missed temp re-bills, un-invoiced milestones, and slow collections. Connecting placements to invoices to payments closes those gaps.
Turn every placement into a paid invoice.
VexOps connects candidates, placements, and client invoicing end to end — launching Q2 2026.
Join the waitlist → — the first 100 members get 30 days free at launch.