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Accounts receivable outsourcing: Things to know before hiring an external team

Accounts receivable outsourcing: Things to know before hiring an external team

Accounts receivable is among the tasks that most companies usually outsource. As your customer count increases, you may realize that following up with clients with unsettled accounts can take a great deal of your time and resources. 

Moving your ARM process offshore can be a lot simpler and safer. With the exceeding demands from the industry, outsourcing providers can be very helpful in promoting growth and productivity in a company.

Having said that, there are still a lot of things to know about accounts receivable outsourcing. This article discusses all of the questions you may have about the process.

What are accounts receivables? 

Accounts receivable (AR) refers to the money that has not yet been paid for by a company’s customers. It is generated when shoppers purchase products or services through a credit line.

Usually, AR departments have two main functions — tracking revenue expected to be received and collecting those revenues. However, some can provide credit checks on clients and collect outstanding balances from late payers. 

They can also make reconciliatory adjustments to the accounts and find errors that need fixing. Moreover, they can also process requests for refunds and credits from clients.

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With all these tasks, it is understandable that this function consumes considerable time on your staff’s daily tasks. That is why several companies prefer to outsource their AR services.

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What are accounts receivables?

How does accounts receivable outsourcing work?

Accounts receivable outsourcing means handing over this specific accounting task to a third party. This strategy helps a company obtain a more effective credit control system and healthier accounts without neglecting other core parts of the business.

By outsourcing this department, you can gain the following advantages:

  • Streamlined process.  Outsourcing gives you access to a dedicated team to care of all your AR-related needs that ensure enhanced accuracy, timeliness, and efficiency.
  • Decreased administrative costs. Having an in-house AR staff involves hiring, training, and maintaining staff, which can get expensive. Outsourcing allows you to avoid costly fees and shift focus to more value-adding functions.
  • Integrated collection system. An experienced specialist partner knows how to effectively integrate the billing and payment collection process, enabling spend management and minimizing problems caused by overdue accounts.

In most cases, outsourcing providers offer a wide range of solutions — including order and cash management, billing, cash management, and debt analysis — to their clients.

Common things to know about accounts receivable outsourcing

To help you ease into the accounts receivable outsourcing process smoothly, we’ve gathered the main questions that you may have about this strategy.

Why outsource?

Hiring, training, and managing an in-house AR team can be challenging. Accounts receivable outsourcing helps free up time and resources so that a business could focus on its core competencies.

Outsourcing specialists also employ highly qualified professionals at a significantly lower cost without affecting the quality of the service. With their assistance, the organization’s overall productivity could dramatically improve.

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Is it secure?

Data breaches are happening frequently, especially in this digital age. Outsourcing agencies have experts that know how to securely access and store confidential information. 

With their service, you are ensured that your customer’s info will stay behind several security protocols that could fend off attacks.

They also invest in the very best technology through training, firewalls, monitoring, encryption, and physical security to safeguard the information that could harm your company and your clients.

Does it cause problems more than it solves?

The right outsourcing partner can easily become a virtual extension of your internal team without any problems. They can study your process to know the right way to support your business.

They can also provide real-time updates or use your company’s file management system to solve your account receivables. Further, they can alleviate a great deal of work in your company, all while increasing your cash flow.

Common things to know about accounts receivable outsourcing
Common things to know about accounts receivable outsourcing

Will you lose control of your business?

Accounts receivable outsourcing partners do not take hold of your business — no matter what task you assign to them. They can work with your set structure, such as your preferred payment methods, security standards, payment timelines, and the process for overdue accounts.   

They act as an ally to enable your business to grow and succeed in its endeavors. Your company will still have the final say in decisions or strategies that should be made.

Can SMEs outsource their AR function?

The size of the business is not a prerequisite for outsourcing finance and accounting functions. Companies of all shapes and sizes can take advantage of accounts receivable outsourcing.

Small and medium-sized enterprises (SMEs), in particular, can gain significant benefits from outsourcing their AR processes. Because it is a cost-effective solution, every company can use it to free up more time for their internal team.

Introducing Doxa’s borderless talent™

Finding the right accounts receivable outsourcing partner is crucial. Their expertise, technology, and experience in the field will help maintain control over your finances. 

Doxa can provide your company with borderless talent™ who are highly skilled in any vertical. They can help grow your business by connecting you with offshore professionals, saving up to 70% on labor costs.

They follow a “meticulous process” in finding the right talent for your business, ensuring that your needs can be met and accomplished under their service.

Doxa offers support across different fields including, customer service, sales, accounting, bookkeeping, accounts receivables, social media, email marketing, web development, software engineering, and more!

Visit Doxa’s website now to learn more about the company’s offerings.

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Outsource Accelerator is the trusted source of independent information, advisory and expert implementation of Business Process Outsourcing (BPO).

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Outsource Accelerator offers the world’s leading aggregator marketplace for outsourcing. It specifically provides the conduit between world-leading outsourcing suppliers and the businesses – clients – across the globe.

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About Derek Gallimore

Derek Gallimore has been in business for 20 years, outsourcing for over eight years, and has been living in Manila (the heart of global outsourcing) since 2014. Derek is the founder and CEO of Outsource Accelerator, and is regarded as a leading expert on all things outsourcing.