Accounts receivable are not limited to businesses - individuals have them as well. People get receivables from their employers in the form of a monthly or bi-weekly paycheck. They are legally owed this money for services (work) already provided
A fine-tuned Accounts Receivable function is vitally important to the cash flow of a business, and it does require an investment of time, talent, and resources in order for it to be effective. A fully staffed in-house department for receivables has become a thing of the past. For a growing number of companies, outsourcing has become a viable, efficient and cost effective solution. Companies are finding they can benefit from outsourcing in a number of ways
- The opportunity to work with a dedicated and experienced team of professionals
- Increased efficiency by eliminating the day-to-day operations within a department
- Enhanced ability to focus on your core business operations
- Reduced staffing, training, and overhead costs
- Increased cash flow and bad debt recovery
Benefits
- Increase Cash Flow
- Reduction In DSO (Days Sales Outstanding)
- Immediate Access To World Class Capabilities
- Reduction In Overall Costs
- Identify And Address Billing & Customer Service Issues
Faster And More Efficiently
- Have Quality And Accurate Information
- Increase Customer Retention
- Identify & Implement Additional Selling Opportunities
- Improve The Productivity Of Your Staff By Using Arouba
Account Receivables Management (A2RM) For:
- Reminder Calls
- Requests For Duplicate Invoices And Dispute Identification
- Leaving Your Staff Free To Handle More Pressing Issues
- Manage A Part Of Your Operation During Peak Periods
- Assist Your Staff During An Acquisition, Merger Or Special Project
- Clear Up Backlogged Past Due Accounts
It is at this point where outsourcing accounts receivable portfolios works to the advantage of any company that sells on credit.
Bottom Line- Increased recoveries, not cost savings, is often the number one reason companies turn to outsourcing. In accounts receivable, this is fairly easy to measure by looking at Days Sales Outstanding (DSO) and the reduction in bad debt. The quicker and more efficiently the accounts receivable portfolio is collected, the better the company's bottom line.
Expertise- partnering with leaders in non-core business functions enables companies to achieve overall excellence. Accounts are less likely to become delinquent when a staff of professionals handles advance screening and customer contact. Fewer delinquencies within the accounts receivable portfolio translate into increased company profits.
Technology- In many fields, and particularly in accounts receivable, access to the most current technology determines success. Outsourcing allows a company to take advantage of this, without the substantial and often prohibitive investment required.
Consistency- Outsourcing receivables allows for consistency on two fronts. First, there is a dedicated staff to ensure that invoices are followed up on in a timely and professional manner. Second, a volume increase or decrease will not affect performance.
Core Business Focus- this can well be considered the underlying benefit to all outsourcing relationships. Outsourcing allows a company to concentrate on its business-its products or services-and the reason its customers are there. The data management, customer follow-up and technology required to manage receivables can consume vast resources. The outsourcing firm can usually manage these functions more efficiently. This efficiency leads to tangible results. Prompt and efficient follow-ups significantly reduce the number of accounts that become delinquent, thereby maintaining a company's core client base, which in turn leads to increased sales.
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