It’s not uncommon for businesses to outsource various processes. After all, it can be faster, more reliable, and much more cost-effective to get a team of professionals to handle some of the tasks you need to complete to keep your business afloat. Accounts receivable management is one of those tasks often up for consideration when talk turns to outsourcing.
Any business can outsource this task; there’s no such thing as “too big” or “too small” when it comes to sending it out of house. But how will you know when the time is right? If you’re seeing these five signs, you’ll know it’s time.
1. Invoices and Notices Go out Late
Has your in-house team been struggling to send out invoices on time? What about follow-ups—like a reminder about a due date or a warning about an overdue payment? If these notifications aren’t going out on time, chances are your customers aren’t paying you promptly—even after the due date has passed.
Even big businesses can struggle with sending out notifications on time, especially if they’re growing or you’re using older technology. Consider outsourcing your accounts receivable management to ensure your notices are getting out on time.
2. Your Tech Is Outdated
Speaking of outdated technology, did you know it’s probably holding you back? Your accounts receivable team members can’t be as effective and efficient as they could be when they’re using outmoded technology.
Yet upgrading to a new system often results in a huge bill for businesses: First you have to pay for the new system, then new programs, and then you need to train everyone to use the system. Skip the bill and outsource instead; part of a third-party provider’s job is to stay up to date with the latest technology.
3. Late Payments Are the Norm
As mentioned, if notices aren’t going out on time, you’re probably not getting paid on time. One great thing about outsourced accounts receivable is that it usually results in accelerated account collection—meaning you get paid sooner.
First, your invoices and overdue reminders are going out on time, which gives customers a fair chance to pay. Second, the partner provider’s team is ready to follow up with customers when their bills become overdue and to settle the account as quickly as possible. Your in-house team may not be quite so prompt—especially if they’re already feeling overwhelmed. Better technology also allows the team to track accounts more efficiently.
4. Your Overhead Is Sky-High
Most businesses look to outsourcing as a solution to high overhead costs in any number of departments; customer service and HR are usual suspects in the outsourcing game. Accounts receivable’s overhead can also be high; the work of managing accounts is never-ending. And if your team isn’t working efficiently, you’re spending more time and money than you need to.
Outsourcing is often the solution to this problem, since it helps firms save money on various processes. A dedicated team using the latest technology is almost certainly going to be able to complete the process more efficiently—saving you both time and money, without needing to invest in hiring and training.
5. Your Business Is Growing
A growing business can lead to growing pains—especially in the accounts receivable department, and especially if you’re already struggling to keep up. Since accounts receivable employees handle everything from initial customer assessment and account creation to collecting overdue payments, they’re exponentially affected by growth. More business means more accounts—and more customers. In turn, there’s more invoices, more reminders—and maybe even more overdue payments.
Give your team members the helping hand they deserve by outsourcing this task to a third party.