Considering accounts receivable outsourcing? As one of the many areas of finance and accounting a third party can handle for your organization, it includes processes like:
- Order management and invoicing
- Remittance processing
- Cash application and posting
- Customer collection management
- Refunds and settlements
While many people choose to work with accounts receivable outsourcing companies because doing so can help save money, very rarely is that the only reason. Below, we’ll explore seven of the biggest reasons companies choose to outsource this essential business function and why they thrive after.
1. Taking non-core functions off your plate lets your organization focus on the core business.
Whether you’re talking floorspace or the constant pressure of overseeing additional departments, it’s undeniable that keeping non-core functions in-house can spread an organization thin. Moreover, these functions aren’t what the business does best, which means they’re likely not being handled as efficiently or accurately as they might otherwise be further adding to the drain. When you take these periphery tasks off your plate, your organization is free to focus on what it does best, giving you more opportunity to grow and thrive.
2. Efficiency gains boost service and reduce costs.
At the same time, these functions that are not central to your business, and are not what you do best, are what accounts receivable outsourcing companies do best. Your accounts receivable outsourcing cost will be less than it would be keeping processes in-house and the efficiency gains will improve service as well.
3. Labor costs drop too.
On the one hand, efficiency created through automation, better training, and refinement of processes will naturally reduce your labor costs too. This is why companies can save money even if they’re outsourcing the work and keeping it under their own roof. However, accounts receivable outsourcing companies sometimes have wide footprints you can tap into for additional labor savings. DATAMARK, for example, often manages mailrooms and scanning for our clients in our facilities in Mexico. They’re just across the border from our El Paso, Texas headquarters for the optimal mix of service and savings. Certain processes involved in accounts receivable outsourcing can be carried out there, as well as in our facilities in India, and are all handled by our highly proficient team, delivering an extra measure of value for our clients if they wish.
4. The collection process speeds up, keeping working capital flowing.
Working capital issues are tied to countless business failures and for good reasons. If you don’t know how much you have, if you overestimate, or if you aren’t getting paid promptly, you’re going to run dry when it’s time for your company to make payroll and pay other bills. The increased efficiencies associated with outsourcing keeps cash flowing into your organization so you can keep working, producing, and growing.
5. Process enhancements increase accuracy and service.
Research shows that around 90 percent of Excel spreadsheets have errors from manual entry. As your processes are enhanced through a mixture of automation, training, and other process improvements, accuracy and service get a major boost.
6. Business continuity planning can be built in.
One of the things weighing on the minds of business leaders today is continuity. Pandemics, natural disasters, and human-caused issues can prevent your organization from managing accounts receivable processes. When you outsource them, you can naturally build in risk management strategies ranging from improved security through diversification.
7. Enhanced reporting and transparency ensures you know your cashflow and other pivotal details.
At the end of the day, having the data necessary to make strategic decisions will be one of the most crucial aspects of driving your business forward. Although not all accounts receivable outsourcing companies will provide you with what you need, companies like DATAMARK make it a source of pride. We’re excited to show our clients the value we’re delivering with regular reporting and access to numbers on demand.
Create Your Custom Accounts Receivable Outsourcing Plan with DATAMARK
No two companies are alike. Whether you need payments processed faster, better management of employee reimbursements, or more transparency into the financial health of your company, we can help. With more than 30 years helping Fortune 500 companies, government agencies, and large enterprises transform their back-office business processes and grow, DATAMARK can take your organization where you need it to go to. Contact us for a consultation.