What does Sonovate do for UK recruitment agencies?
Sonovate combines contractor onboarding (RTW checks, contracts, KYC), timesheet capture, AWR compliance tracking, weekly payroll administration, RTI reporting, pension auto-enrolment, holiday pay accrual, client invoicing and invoice factoring under one platform. Pays contractors weekly on the agency's behalf and advances the agency margin. Used by 3,000+ UK recruitment agencies. Fee typically 1.5-3% of contractor invoice value covering everything.
What this means for your business
In practice, a recruitment agency using Sonovate hands over the entire back-office side of running contractors. The platform onboards each contractor (right to work checks, contracts, KYC), captures timesheets, tracks AWR compliance, runs weekly payroll with RTI reporting and pension auto-enrolment, and accrues holiday pay.
It then invoices the end client and factors that invoice, meaning it pays the contractor weekly out of its own funds before the client has settled the bill, and advances the agency its margin at the same time. For an SME agency, this removes the need for separate payroll software, a compliance team and a factoring facility.
It is a single monthly fee, typically 1.5 to 3 percent of contractor invoice value, rather than separate charges for payroll, compliance and finance. Over 3,000 UK agencies already use it this way.
Key points
- Sonovate handles contractor onboarding, including right to work checks, contracts and KYC, before any work starts.
- Weekly payroll, RTI reporting and pension auto-enrolment are run automatically, removing the need for separate payroll software.
- Contractors are paid weekly regardless of when the client actually settles the invoice, because Sonovate factors the invoice itself.
- AWR compliance tracking and holiday pay accrual are built into the platform rather than managed manually.
- The all-in fee of 1.5 to 3 percent of invoice value covers payroll, compliance, invoicing and factoring together.
Common pitfalls
Agencies sometimes assume the 1.5 to 3 percent fee is comparable to a standalone factoring discount rate, but it also covers payroll, RTI, pension and AWR administration, so a like for like cost comparison against a separate factoring facility plus payroll bureau is needed before switching. Because Sonovate pays contractors weekly on the agency's behalf, agencies should check exactly how and when the client's payment reconciles against the advance, and what happens if a client invoice is disputed or paid late. As with any factored arrangement, it is worth confirming whether client notification is required and how this affects existing client relationships.
Related questions
Is Sonovate the same as a traditional invoice factoring company?
No, Sonovate combines invoice factoring with payroll, compliance and onboarding tools built specifically for recruitment agencies, rather than offering factoring as a standalone product. A traditional invoice finance provider typically only advances funds against invoices and leaves payroll and compliance to the agency.
Do agencies need a separate payroll provider alongside Sonovate?
No, weekly payroll, RTI reporting and pension auto-enrolment are run within the Sonovate platform, so agencies do not need a separate payroll bureau for contractors managed through it. This is one of the main reasons agencies use it instead of standalone invoice finance.
What size of recruitment agency typically uses this kind of platform?
Sonovate is used by over 3,000 UK recruitment agencies, spanning smaller agencies that want to avoid building in-house payroll and compliance infrastructure through to larger agencies managing high contractor volumes. The all-in fee structure suits agencies that want predictable, bundled costs rather than managing multiple suppliers.
Founder & Managing Director, Muswell Rose, founder and PSC of Best Business Loans Ltd
Adam is the founder and managing director of Muswell Rose and a founder of Best Business Loans Ltd, the company behind Market Invoice. He spent over three years as managing director of Penny, a UK invoice finance business, and his career runs through insurance, mortgages, commercial finance and fintech lending. He writes the Market Invoice library.
Last reviewed: 16 August 2026