If it’s time to outsource accounts receivable management, you’re probably searching for a partner to provide this service. You’re more than ready to send this important task to a team of knowledgeable hands who will provide the assistance you need—so you can get back to your core business.
Yet you also need to spend time finding the right partner, which can prove challenging. There are many companies offering this service. How do you know which one is the right partner for you?
Ask about Experience
The first thing you should ask about is the provider’s experience. How long have they been providing these services? What kinds of companies have they worked with and in which industries? What does their track record look like?
A more experienced company should be able to show you a proven track record, one illustrating the effectiveness of their service. Experience goes a long way when it comes to managing your receivables.
What Is Your Process?
You should always inquire about a potential partner’s process for managing this business task. Your partner outsourcer should be able to present you with a streamlined process. They should also be able to illustrate the benefits of this process.
If a potential partner’s process seems messy or incomplete, or if it looks too similar to your own (inefficient) process, you may want to keep looking.
What’s the Plan?
Ask a potential provider to come up with a plan for managing your accounts. An experienced provider should look at your process and either suggest something new or give you pointers on where they’d improve what you’re already doing.
Their plan should encompass every aspect of management you want to hand over. They should be able to show you exactly where you’ll realize more efficiency, better turnover ratio, and cost savings.
Depending upon your situation, you might be looking for someone to manage accounts receivable from end to end, beginning with the customer’s application for a credit account through to third-party collections at the other end.
On the other hand, you might not need such comprehensive service. Maybe you need help with first-party collections. Perhaps you need third-party accounts receivable services alone. Either way, the partner you work with should provide a customized solution for your unique situation, with the services you want and need.
If you’re not sure which services are right for you, your outsourcer should also be able to make suggestions based on your situation.
Case in Point
Ask potential outsources if they have any case studies they can provide. These case studies should illustrate how they’ve worked with other companies to manage accounts receivable more effectively. If the provider has no case studies at all, it can prove risky to work with them.
Be sure to ask the outsourcer for numbers: What costs are associated with accounts receivable management? Do certain services cost extra?
Also ask about how much you’ll save by moving to outsourcing. While there’s a number of good reasons to outsource your accounts receivable, cost is one of the key factors in a decision to outsource.
How Will You Grow?
A final question for any potential outsourcing partner is, “What’s the plan for growth?” Your company won’t stay the same size forever, so you want to know the provider you’re going to work with will be able to scale with you.
How will they handle growth? If you suddenly have a flood of applications and more accounts to manage, they’ll need to be ready.
If you ask these questions, you'll be able to find the right fit for your business.