As your company’s CFO, there are probably a lot of things that keep you up at night. From economic uncertainty to Congressional dysfunction to interest rates, there’s no shortage of issues to worry about. And what's worse, you can't control them.
But whether the Feds raise rates or make decisions that put the economy on stronger financial footing,there is one big concern that you can have more power over:
Your company’s cash flow.
If you’re like most CFOs, you’re concerned with every aspect of it, all the time. And you need to be to do your job well. That means you have to constantly be on top of all problems with collections, cash allocations, access to capital and how your organization can best use available cash.
But where do you begin? One effective solution is to outsource A/R management to an experienced receivables management service. Here are 4 questions you may have about the process – and how your company can benefit from it:
#1: Why should I consider outsourcing A/R management?
Because your receivables are likely your biggest asset. As a result, slow paying or late clients canseriously impact your bottom line, more than you might realize one client can.
But a receivables management service can handle the tedious tasks associated with A/R, shortening the time it takes to close your books, and helping you determine the collection processes that work best for your company. Rather than creating and sending statements to clients, making calls to follow up on payments, and chasing late invoices, you and your team can instead focus on development, marketing and raising capital. In other words, what your strengths and passions are.
A receivables management service can also monitor and track your debtors using the latest technology, as well as conduct comprehensive credit and background reports so you can make crucial decisions about current and future borrowers more easily. You can then determine whether customers are truly credit-worthy and gain peace of mind knowing they’ll be able to pay their debt on time.
Still not convinced? Here are a few more reasons to consider outsourcing A/R management:
Improve customer communication.
Get ahead of and deal with any customer financial issues before they become major problems.
Uncover customer service issues and improve customer satisfaction levels.
Build a customer base that’s more educated about and follows your payment procedures.
#2: Won’t outsourcing mean I lose control?
No, you’re still making the decisions. A receivables management service is simply providing you with the data you need to make informed choices for your company.
In that way, you actually gain more control. Someone else is handling the time-consuming work and headaches, so you have the time and energy to review monthly reports and plan for the health of the company. That time spent on big picture thinking will help you run your team better and meet your goals
#3: Will outsourcing compromise confidential data?
Not at all. A reputable receivables management service takes great strides to ensure all your company’s data is completely secure. They conduct background checks on their employees and require them to sign a document pledging to maintain confidentiality.
In addition, a receivables management service will restrict access to their facilities and operating systems, as well as ensure all data is securely backed up. Due to the strict procedures followed, outsourcing can actually boost security and confidentiality.
#4: How can I tell whether it’s the right time to outsource?
Maintaining cash flow requires regular contact with your customer base. So if you don’t have the resources to stay in touch consistently with customers during the accounts receivable process, and to call every late paying customer within five days, then it’s time to consider A/R outsourcing.
Keep in mind, when you do, you are in essence increasing in-house staff and resources without the cost and overhead of a new hire.