01.05.2021 | Posted by Erik
7 Things to Ask Before Choosing an Outsourced A/R Vendor
Once you’ve decided to outsource A/R, the most challenging part of the process lies in finding a qualified vendor. Many companies offer outsourced accounts receivable services, so it can be difficult to pick the right one.
We’ve put together some simple questions to help ensure that you choose the best outsourced A/R vendor for your company.
7 Questions to Ask When Evaluating an Outsourced A/R Vendor
There are several questions you should ask when evaluating an outsourced A/R vendor. Here are the top seven.
1. Do they have dedicated A/R specialists assigned to each client?
Does one A/R specialist work with the same client day-in and day out? If not, this can lead to tons of frustration with your clients.
Think about it this way. Your client spends thirty minutes on the phone with an A/R specialist on Monday explaining their situation and making a game plan. Then, they get a call from an entirely different specialist on Tuesday who doesn’t know anything about them. That’s going to be frustrating.
On the other hand, when a dedicated A/R specialist works with the same customer, they can develop a rapport, thus saving time and building better customer relationships. Ultimately, this will produce better results.
2. Do they have a customer service approach?
Too many outsourced A/R companies take a transactional approach. It’s a “wear the customer down until they pay” mentality. This method is terrible for your brand since your customers will view the outsourced A/R vendor as an extension of your company.
If your vendor has poor customer service skills, it will inevitably reflect poorly on you. We’ve found that a human approach works much better than a transactional one.
As the saying goes, “you attract more flies with honey.” That’s definitely true in A/R.
3. Are they a collection agency?
Many people think collection agencies are the same as A/R companies. The truth is, they’re very different. Many collection companies say they do A/R, but they really don’t, or they don’t do it very well.
Collection agencies get assigned the claims and collect payments on your behalf for a percentage of the funds collected. In collection companies where they do both, they tend to rush the A/R process and skip to the collections phase (they make more money that way). Instead, when you outsource A/R with Axim, you’re simply hiring someone to manage all of your accounts for a flat monthly rate – no percentage-based fees, no debt collections.
A collections approach to A/R leads to poor customer service for your customers and reduced cash flow for you. It’s important to choose a company that only offers outsourced accounts receivable services.
4. Do they do a lot of other accounting tasks, or is A/R their focus?
Unless the company focuses on A/R, they likely won’t have systems and processes in place to manage A/R effectively. They’ll use whatever systems (or lack thereof) you already have implemented to try and collect. If your current process isn’t effective, chances are theirs won’t be any better.
A/R requires a unique set of systems to be effective. Some companies will offer software and tech solutions for A/R, but they won’t make the phone calls for you. Hence the importance of hiring a company with a thorough, proven A/R process in place.
5. How long have they been in business?
New A/R companies are popping up every day, but they don’t necessarily have the expertise or tools to deliver long-term results. Make sure to ask about a company’s experience. Longevity in the industry means a vendor understands A/R and isn’t driving people away with hostile collection calls.
6. Do they actually contact customers, or do they just offer software?
When you outsource A/R, check that the company will actually make calls to your customers. Many companies offer automated solutions using software, but that only helps with A/R tracking – someone still has to call your customers.
Sure, there’s a place for automation and software in collections. The best A/R vendors are utilizing some type of software to systematize their process. But tech tools aren’t the full solution.
7. Can they integrate with your internal accounting system?
Before you sign the dotted line to outsource A/R, make sure the company can integrate with your internal accounting system. Some will only work with specific accounting software like QuickBooks, while others can accommodate whatever system you’re already using (here at Axim, we can work with pretty much any system under the sun).
Outsource A/R and Know You’re Making the Best Choice
If you use these seven questions to evaluate prospective A/R vendors, you’re sure to find a company that will work for you. At Axim, we’ve provided top-notch outsourced A/R for our clients for over thirty years.
We’re a customer service-focused company with dedicated A/R specialists assigned to each account. We only do A/R, so A/R gets our full attention. We use automation technology, but a huge part of what makes us successful is getting on the phone and talking to people.