Outsourcing accounts receivable management isn’t all that unusual. Since the task is often a time-consuming one, which can eat up a lot of a business’s finite resources, it’s often one of the services people consider outsourcing, along with customer service and sales and acquisitions.
Some people remain leery about outsourcing this vital business operation, however. This skepticism has resulted in a lot of myths around outsourcing—most of which are mere tall tales. Here are a few of the most common myths—and why they’re more fantastical than unicorns and dragons.
Managing This Task Is Easy
You might have dispelled this myth on your own if you’ve been trying to manage it within your firm. Whether your business is a small one or a huge corporation, managing accounts receivable is no easy task. It’s a lot more involved than you might think at first glance: It starts with assessing customers for account credit, then generating bills, sending them out, reminding customers, attempting to collect overdue accounts, and enforcing your credit policies.
It’s a lot to do! It can also become quite time consuming and, if you don’t have a dedicated team or staff member to look after it, it becomes even more difficult. Worse, this task is one of the most vital for a business, so managing it well is incredibly important for the health of your firm.
Outsourcing Means a Loss of Control
This is a fairly common myth when it comes to outsourcing almost any task in a business. People fear turning the task over to another will mean they have to give up their own policies and adopt those of the service provider.
Almost nothing could be further from the truth. Your service provider should be able to work within your framework for credit, including payment timelines, how you accept payment, and even how you handle overdue accounts. If you don’t currently have a framework in place, they may be able to make suggestions, but this is ultimately up to you.
It Only Works for Big Companies
Most people think about outsourcing as something big firms do to reduce their headcount and reap the benefits of having fewer staff on the payroll. The truth is outsourcing has many advantages for companies both big and small.
Small companies benefit from the expertise of their partner providers; in most cases, these third parties’ dedicated accounts receivable teams are proven to be more efficient than in-house accountants. If dealing with accounts receivable isn’t your strong suit, then outsourcing this task puts it into the hands of those best equipped to deal with it and allows you to get back to running your business and making strategic decisions.
Outsourcing Isn’t Secure
Many firms have concerns about security these days, and with good reason. How often do you read about a data breach affecting a third-party company that works for all kinds of high-profile clients? Businesses are becoming more concerned about who controls and protects their customers’ data.
Accounts receivable obviously collects some important information about your customers, including their payment information. You might be concerned about security—and rightfully so. Nonetheless, a good third-party provider should be just as concerned about security and should be taking measures to keep your data—and your customers’ information—safe.
It Causes More Problems Than It Solves
Plenty of people think outsourced services—including accounts receivable—are more headache than they’re worth. In most cases, the firms they’re working with simply aren’t the right partners.
When you’ve teamed up with a great accounts receivable management team, you’ll see all kinds of advantages—from reduced risk to improved cash flows and more.