A good financial service keeps the business going. Right?
As business owners, you are well aware that a solid financial system is the backbone of your business. Raising capital and turning it into revenue is the most crucial process, which makes it perfectly understandable for the need to have a flawless, organized collections system.
There are good times and bad times when running a business. And let’s face it, not every supplier or customer pays on time.
Even though there may be a lot of chasing, the good news is that you don’t have to. Somebody can keep track of payments and chase customers. Receivables management can now be outsourced, and for good rates, at that.
Receivables management is a service that helps keep track of all payments your business is owed. From customers to partners and other deals a team of RM can help you. This also includes making sure that bills are issued and sent, and that payments are collected on time.
While many business owners prefer to do the collection themselves, other demands of running a business. However, this can take away your time and attention away. Leaving one of your most important financial systems overlooked.
Don’t have time to focus on your accounts receivable? There is always a way to make sure your bills get sent out and payments are collected on time. When it comes to money, it’s important to keep things in check. So have a strong, reliable process in place.
Unfortunately, other MSMEs don’t have this luxury.
While it seems easier to hire an accountant or a finance professional to handle your collections, you’d be surprised at the quality and value you get from outsourcing receivable management services.
It makes sense that your money is important and should be treated with the utmost privacy.
Having a third party manage your business may seem scary at first. So before you start outsourcing, make sure you do your research on the credibility of the companies you are thinking of working with.
Sifting through receipts and invoices takes a lot of time and work, and being understaffed may lead to many errors along the way. In finances, there is very little room for error, and it helps to keep all financial documents organized, and the cash flow consistent.
Outsourcing receivable management lets you rest easy knowing your cash flow is handled expertly and professionally. A common misconception in outsourcing is that agents are not as knowledgeable in the field; this is not true, as BPO companies hire actual financial professionals for receivables management and other financial services.
One of the main reasons business owners outsource is for convenience. Keeping track of all payment deadlines and other dates takes a lot of time, and the less focus you have, the more likely you are to forget issuing bills and collecting payments.
Outsourcing receivables management allows you to stick to payment schedules and deadlines, as having more hands helps keep everything organized and up-to-date. It also helps with chasing missed due dates, as your outsourced receivables management staff handle all the chasing for you. This makes sure your cash flow is uninterrupted, as you are more likely to receive your payments on time, helping you keep a good balance on your finances.
For small and medium-sized businesses, it’s normal to have staff that change hats over the course of a work day. After all, your business is still growing and to make sure funds are allocated to more crucial parts of the business, your staff pitches in and helps with other business functions apart from their own.
While having multiple duties helps an employee learn more about the trade, being spread too thin may cause problems along the way. Having staff that focus just on maintaining your cash flow and keeping your accounts receivable organized helps the rest of the staff focus on their main duty, which, in turn, makes your operations more efficient.
Just like any other business function, outsourcing has its own pitfalls. Before you take a dive into outsourcing, it’s best to be aware of the downsides of having a third-party management handle your receivables management for you.
Having a third party handle your receivable management may expose your business to security risks and other errors.
While this may seem worrying at first, you can minimize the risk by making sure you outsource from a legitimate, credible provider that complies to international standards in security and confidentiality.
Most outsourced staff are several time zones away, which means issues may take time to reach you. This may seem like a scary problem. But it can be solved with good communication and a reliable process.
Make sure to tell your provider what your standards and systems are so that all reports can be made and sent on time.
It also helps to find a provider who is also a partner. This means that they share the responsibility of running your business the way you think is best.
Outsourced receivables management is just as reliable as their in-house counterpart, but it may have its limits. Some third party managers may be selective about the parts of the process they want to handle.
Be sure to communicate your needs properly to your provider. It’s also crucial to ask them to identify the coverage of the package to maximize the value of your service and avoid any unnecessary charges.
Now you’ve decided to outsource. Where to go next?
Outsourcing, when done right, improves your business’ overall performance, as it makes sure work is allocated to all the right places and all the right people. Better performance means better revenue.
In order to get a good start in outsourcing, it’s best to start by taking a good look at your business and identifying all the areas that need support. While accounts receivable may need attention, other parts of your operation might need support as well, and you’d be surprised there are outsourcing services available for these business functions as well.
Once you know what you need, it’s easy to know where to start looking. Shopping for outsourcing providers means you have to check everything – legitimacy, performance and rates. It’s easy to get carried away by attractive packages and rates, so it’s always best to make sure that the performance lives up to the marketing.
Here at Magellan Solutions, we understand that maintaining cash flow is crucial to all businesses. It is our goal to help you grow your business by providing support where you need it.
Magellan Solutions was one of the first business process outsourcing (BPO) company to serve small and medium-sized businesses (SMEs). For more than 18 years, it has been giving businesses all over the world excellent business solutions. With more than a decade of experience in the field, an ISO certification, and HIPAA compliance, you can trust us to provide services that meet international standards.
Choose a partner that’s also a provider. Let Magellan Solutions open up possibilities for you and your business.
Talk to us today and find out!
Contact us today for more information.
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