Outsourcing is once again redefining the way we do business in ways that were unthinkable just a decade ago. It enables your company to focus on what it does best while potentially reducing costs. Lower costs mean a stronger bottom line. But how does outsourcing fit with accounts receivable?
Outsourcing can create lower in-house head count and free up workspace while allowing your team to pursue new, potentially lucrative, projects. A recent study found that 68% of companies surveyed engaged in some form of business outsourcing. This movement has been a primary mover in economic success in today’s markets.
You might ask, “How does outsourcing work with accounts receivable?” In the EU alone, outstanding invoices total 74.3 billion euros. Roughly a third, 22.3 billion, are late! Late payments and poor payers can trigger a ripple effect that turns into a tidal wave of wasted time and increase costs in recuperating late payments. This can create serious cash flow problems. Ultimately, unpaid invoices lead to loss of value.
The assignment of this most critical, non-core, function to a reputable outsourcing firm can foster:
- increased cash flow
- reduced operating and administration costs
- improved control over accounts receivable management
- increased sales to slow paying clients
- fewer delinquencies resulting in lower collection costs
- improved customer service
There are hundreds of outsourcing firms out there. It’s a big issue. A search on Google revealed 1.3 million entries! Work hard to find a firm that provides a comprehensive service: collections, credit, insurance, processing, escrow services and chasing down deadbeat debtors. Sometimes the easiest thing to do is to contact your bank.
Fortis Commercial Finance for example, offers a full line of solutions for the management of most risks related to receivable collection. They can take on the day-to-day burdens of managing the whole process.