12.23.2020 | Posted by Erik
Should I Consider Outsourcing Accounts Receivable Management?
Many companies are unsure about outsourcing accounts receivable management. By not outsourcing A/R, however, you could be missing out on some valuable benefits. Let’s take a look.
3 Big Benefits of Outsourcing Accounts Receivable Management
Here are three of the most significant benefits of outsourcing A/R.
1. Improved Cashflow
Outsourcing your accounts receivable management improves your cash flow in several ways:
- More Invoices are Paid on Time: At a base level, A/R companies are skilled at getting invoices paid. You can get out in front of potential problems and fix any administrative issues in advance to help bring in money faster.
- Save Money: Instead of paying your employees to collect on past due accounts, they can focus on more profitable activities, helping increase revenue-generation potential.
- Pay Less Interest: Outsourcing accounts receivables helps you get paid quicker, so if you borrow money against receivables, you’ll pay less interest against those receivables.
You can put this extra cash flow towards other, more profitable efforts, like business development, marketing, lead generation, customer experience, employee benefits, and more.
2. Decreased Stress
When your company is struggling with past due accounts, the entire staff feels the stress. The stress trickles down from the top and seeps into every part of the company.
Executives see the debt’s effect on profitability. Accountants spend their days doing mathematic gymnastics to make sure everyone gets paid. Employees stress about having to call their clients to ask about payment again. It’s exhausting for everyone.
Outsourcing accounts receivable management might provide the biggest relief for your accounting department. In many cases, it’s the accountants that carry the burden of unpaid invoices, even if it isn’t in their official job description.
They have to make sure vendors are paid, employees are paid, and the lights stay on. If your cash flow is dwindling, the accounting department has to explain to everyone why they aren’t getting paid right away. Accounting is often in charge of collection activities too.
By outsourcing A/R, you can take yourself and staff out of the pressure cooker and provide everyone a better work-life balance. If every employee can focus on what they’re paid to do (and not on unpaid invoices), you’ll have a much more efficient, happy, and balanced team.
3. Strong Customer Relationships
Calling your customers to collect can be downright uncomfortable. It can be even more challenging in these uncertain times when everyone is struggling a little more than usual.
Companies often have relationships with their clients, and it’s difficult to ask for payment when you know they’re struggling, too. Outsourcing accounts receivable management allows you to maintain your customer relationships and still get paid. A professional A/R company will handle the process in a sensitive yet strictly businesslike manner, facilitating invoice payment without using scare tactics. You can rest easy knowing your customers are receiving professional treatment while avoiding uncomfortable conversations yourself.
Read more: 3 Signs Your A/R Management Isn’t Working.
Ready to Start Outsourcing Accounts Receivable Management?
If you want to improve cash flow, decrease stress, and maintain your customer relationships, consider outsourcing accounts receivable management.
Sometimes, it’s not even about the benefits. In the last nine months, 75% of our new clients are just tired of doing A/R. If that sounds like you – that’s perfectly acceptable, too.
Here at Axim, we average 3% receivables over 30 days past due. If you could enjoy the aforementioned benefits, plus get your 30 days past due down to 3%, how much more money would be in your pocket?