Accounts receivable management can be a difficult subject to tackle, and many firms dislike undertaking the task. Nonetheless, it is important for business owners to ensurethey are managing accounts receivable in an effective manner. After all, overdue accounts adversely affect your cash flow and your income, which could be the difference between turning a profit and the firm going belly up.
One problem is that few firms know how to manage these accounts effectively. In those cases, organizations should consider outsourcing their accounts receivable management to a partner provider that has the expertise and experience needed to handle them.
If you’re considering more effective receivables management, make sure you know about these three types of services.
1. Third-Party Management
When you think of outsourcing, especially for accounts receivable management, you likely think of third-party management. That means you bring in a partner provider to deliver the service for you; the provider works on your behalf to collect the account from the customer.
While many companies contract out and get third-party management, there is also a negative stereotype about what this means; many people think calling in the “collections agency” signifies the end of your relationship with your customer. It does not have to be that way, however.
While accounts receivable collection is a late stage in your customer relationship, a third party can offer a fresh perspective that can make the process less acrimonious for everyone involved.
Sometimes, communications between an organization and a customer break down, and sometimes, the customer simply cannot be found. That is where a process like skip-tracing can help ensure your profitability remains intact.
Your provider will help you track down these misplaced customers and collect on outstanding debts. The provider will be sure to employ your strategy and ensure interactions with your customers remain as positive as possible, so as to uphold your brand.
3. Industry Compliant Services
While not a service in and of itself, keep in mind that you want any provider you work with to adhere to external compliance standards. Some standards include ISO 9001 for quality management and ISO 27001 for information security. Partnering with a provider that is compliant with external standards can help protect your business, your reputation, and your customers.
A Friendly Reminder
Sometimes, all your customers need is a gentle reminder that their accounts are due or overdue. But, sometimes, you may not have the in-house resources to spend the time sending out reminders.
A provider can help you send out these reminder notes or give your customers a quick, automated call to remind them about their accounts.
So What’s the Hesitation?
The major reason business owners don’t like outsourcing accounts receivable management is that they fear a third party will harm their brands. In those cases, people feel that they need to keep the management in house in order to better control brand interactions with customers.
But a partner provider can help you in this situation too. Even if you do determine to keep the actual management in house, you may find that you need help. Perhaps you don’t have in-house expertise or experience, or perhaps you simply don’t know how to go about managing accounts receivable.
A partner provider can help you by providing the infrastructure you need, along with the experience and expertise. The provider will work closely with you to determine the perfect solution—one that will uphold your brand and meet all of your needs.