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Topics: Accounts Receivable Management

Getting the most efficient collections process is a challenge for any business, big or small. The more efficient you are at collecting your accounts, however, the better your cash flow will be. In turn, you can manage your debts more effectively. 

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Becoming more efficient is one reason some business owners consider outsourcing their collections. Yet even those who believe outsourcing is the right choice have questions. What exactly goes on behind the scenes when you outsource collections?

The Process

The first thing to change is your process. It might not change much. It could change a lot. It all depends on how you’ve been handling collections in-house to this point. Your outsourcing provider might use different technology. It may train its accounts receivable experts to handle customer applications in a different manner. 

Changes aren’t designed to undermine your policies or your branding. Instead, they’re ways of increasing the efficiency and effectiveness of the process. 

Before any changes are made, however, your outsourcer should discuss them with you, especially if they might impact your policies.

Policy Review

You should sit down with your outsourcer and conduct a policy review. This way, you can rest assured everything your partner does will be in line with your policies. 

If you don’t already have good policies about credit or collections in place, you’ll work with your partner to develop them now. If you have policies in place, now is a good time to discuss what’s working and what’s not. Revision isn’t a bad thing!

Service Level Agreement

You’ll also discuss the level of service your partner provides when you outsource collections. How many people will look after your customer accounts? Will the outsourcer handle every aspect of accounts receivable, or will they provide only third-party collections services? Will they handle bad debt accounts or customers who need to be skip-traced?

You’ll also want to discuss options for growth. Since you’ll likely sign an agreement for a year or two, be sure you have the opportunity to expand service should you need to. If you don’t, you could end up underserviced, leading to problems with customer service and your cash flows.

Measuring Performance

Your provider should collect statistics about their performance. These measurements, known as metrics, help you understand how outsourcing collections has improved your account collections and where you could still improve.

It’s important to have some concrete measurement of the provider’s performance. Without it, it becomes very difficult to say whether they’re doing a good job. In turn, it becomes more difficult to determine whether your situation has improved or if you should look for another provider.

Great Service

After you outsource collections, your customers should receive great service from the agents handling their accounts. Better technology should mean they receive error-free bills on time, along with reminders about upcoming bills or overdue payments.

They should also receive great service if their accounts are overdue and they need to work on a repayment plan or need other considerations.

Overall, every service should be aligned with both your policies and your brand (during the first-party collections stage). The result should be a consistently great experience for your customers, even through rough patches.

Getting Back to What Matters

Perhaps the best thing about a move to outsource collections is it allows you to get back to the things that matter. It’s a big task for any business to manage. You may have felt pressured for time. Instead, turning collections over to the experts allows you to focus on what really matters for your business.

15-Tips-for-Choosing-an-Outsourcing-Partner

Mike Nolet

Mike Nolet

Mike is the senior vice president of Bill Gosling Outsourcing’s North American operations. He has been leading the operations teams since 2011, bringing over 20 years of previous experience to the team. Mike is a core contributor towards the company’s corporate strategic planning. Since joining Bill Gosling Outsourcing, he has been a driving force behind growth, process improvement, and implementing positive change within the organization. Mike is also a wine aficionado.

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