Accounts Receivable Outsourcing

For a company that sells on credit, the accounts receivable financing portfolio is one of the largest assets. However, often accounts receivable management area of asset is not given due importance or care. In a survey carried out among companies, more than 40 percent revealed that they do not follow through on policies, procedures, or performance targets. It was found that most of those companies do not have enough work forces to focus on this issue. To outsource the task of accounts receivable management is an ideal option for firms selling on credit.

A company can outsource all or a part of its account receivable business functions. Typically the functions which can be outsourced are:

Quantum of outsourcing accounts receivable at a given point of time

Accurate keying of Sales Invoices on the basis of supporting documents like purchase orders, details of vendors, terms of payment etc

Ageing of Receivables

Ensure timely collections and accurate application of payment to the customers accounts

Track and resolve delinquent accounts

Ensure timely and accurate reconciliations of vendors

Maintenance of customer database

Risk ascertainment and analysis of credit worthiness

Customer history maintenance

Creation of new customers or modification of existing customers

Ensuring of appropriate documentation base before adding up a customer

Outsourcing accounts receivable can have several benefits:

Up to 30% to 50% annual A/R processing cost savings without capital investment. The company usually gets the best service at a lowest cost from the service provider.

Improving cash flow

Eliminating postage and material expenses

Increasing revenue by providing cross-selling/up-selling opportunities

Increasing Return on Investment (ROI) for marketing programs

Reducing calls to customer service

Improving customer retention and relationships by building brand

Reduction in bad debt

Utilization of advanced technology

Better control over accounts receivable management

Accounting outsourcing has been identified as an excellent business decision to cut dramatically on the costs and at the same point of time ensures that the work does not suffer. Outsourcing accounting service providers are well equipped with modern technology and experienced professionals who manage the process with great efficiency. More importantly accounting outsourcing will save your time to be invested in making implementing business growth strategies for your company. Needless to highlight by accounting outsourcing is not only cost effective it also saves lots of your time from arranging and managing team of accountants or accountant.