As a business owner, your prime objective is to maximize growth and generate higher revenues for your firm. Adequate management of accounts play a vital role in meeting the aforementioned goal. With ever-growing competition increasing number of business owners have turned to outsourced accounting services. However, one key aspect of the practice is Accounts Receivable Outsourcing Services. This has not received as much attention from practitioners. As a business, accounts receivables are elemental to the company’s growth. Outsourcing this very essential function of your business can work in your best interests in multiple ways. This article sheds light into the best practices about how to efficiently manage your accounting receivables practices with the help of an outsourcing partner.
Managing accounting receivables can often come across as a challenging task. Hence business owners often choose to outsource it to an expert outsourcing services provider. The upside to this, is that a reputable outsourcing partner will bring along years of experience. This will provide your practice with a competitive advantage against your competitors. The ultimate goal behind optimizing your accounts receivable function is to strengthen your working capital. Here are some pointers on how to outsource accounting receivables and what should be the ideal way to do it.
Building a Process:
First off, you need to determine your needs and the nature of work that you wish for the outsourcing services to undertake. Furthermore, well-established accounting receivable services provider will bring along years of experience and expertise. It can work wonders for your practice. After identifying your needs, your outsourcing partner can help you build a robust process in order to best manage your cash in a timely fashion. A few thing the process must include are; to set clear responsibilities to the teams- the sales team, the finance team and the outsourcing partner. What the outsourcing partner will do is monitor all sales and justify each sum of credit issued. In addition to that, the outsourcing services agent will mediate the process and asses the flow of credit. Allocated responsibilities will help the teams to work in tandem. With the assistance of the outsourcing partner credit requests can be approved or rejected based on the availability of meticulous data and past results.
A lot of accounting receivable outsourcing stems from data. For an accounting firm, Data works like blood. It keeps the systems running smoothly. The advantage of having a process in place will simplify the remaining tasks for both- your business as well the accounts receivables manager. The outsourcing partner will manage your customer data in the best ways possible. Assign credit limits, payment terms and agreements, taxation formalities etc. Accounts receivable outsourcing services will monitor all the crucial data that is required to maintain a steady cash flow schedule. Thus making sure that your firm is in a safe spot when it comes to cash. Expert accounts receivable mangers will help your business make the most of your data. A team of experts will streamline the data, mitigate any data glitches, so and so forth. Besides, managing your data will provide you with a better overall projection of your cash flows and the performance of the business.
Billing and Invoicing
It is often perceived that billing and invoicing are fairly simple aspects of accounts receivable management. However, a lot of businesses face challenges in executing error free billing procedures. With the help of an accounts receivable outsourcing professional, this can be managed efficiently- to match and often surpass the capabilities of an in-house accounting receivables management team. Outsourced accounts receivable management service providers adapt a few strategies in order to facilitate efficient billing procedures.
Firstly, expert outsourced accounts receivable management firms will have the industry standard software and IT support which can enable automation to some extent. Subsequently, since the outsourced accounts receivable managers will have a dedicated team of professionals who ensure timely and effective reporting and invoice generation. This will ensure that the most relevant reports are available for your firm in order to complete the payment procedures. Outsourced accounts receivable management services have a sharp attention to detail, using which they can spot anomalies in the data such as, exceeding credit limits, unusual discount rates and so on. This will help your firm in effectively managing your repayment procedures in a way that does not hinder your working capital.
Managing incoming payments
A team of accounts receivable outsourcing mangers will be looking after your cash inflows and making sure that the right invoices are being billed for. With a sizable firm it may so happen that your clients might choose to pay in intervals, as per services/ products availed. In a situation like that an outsourced accounts receivable management service provider will keep all incoming payments in-check. Thus making sure that the payments are coming in as per the agreed terms and conditions. Additionally, the outsourced management team can also set-up a follow-up regime for late or incoming payments and so on. Having an outsourced accounting receivable management partner can negotiate payments, ensure that the discounts being offered are mutually beneficial to both sides etc.
Finally, anyone who has been in the business long enough swears by the fact that cash is King. Managing your accounts receivables effectively can help you protect your King in the best ways possible. In other words, working with an outsourced accounts receivable management firm will help your cash-flow operations smooth and secure. We at Initor Global work with the best in class accountants and analysts who are experts in managing big and small account receivables portfolios. Additionally, at Initor we believe in providing our clients with time bound, result-oriented services in the most cost-effective methods. In terms of working expertise, we are a GDPR compliant organisation and boast a state-of-the-art data privacy and management procedure.
Contact us to find out more about the kind of work that we do. Alternatively, visit to avail a free trail of a selected services tailored to your firm’s specific requirements.