Cash flow is a vital factor behind the success of any business. But many businesses invest heavily in generating sales while not investing enough effort into collecting money from their clients or customers.

When you outsource your credit control function to a specialist company, they will build a plan and a process to help you avoid bad debts, reduce aged debtors, prevent credit extensions to high-risk customers, and achieve higher collection targets. A specialist can help you gain a more structured and consistent approach to outstanding debt management while freeing up your in-house accounting team from the burden.

Some of the key benefits that businesses can expect from outsourced credit control are:

Better cash flow and reduction in bad debts:
Outsourcing can provide professional and reliable assistance to small enterprises and SMEs who don’t have a credit control department in place. 

A credit management partner can enable your business to keep a routine and straightforward record of clients, offer gentle due date reminders, provide swift query resolution, and conduct polite but firm follow-ups for late payments, escalations, and letters & statements. 

Lower operation costs: 
Manual processing of activities such as personnel, paper documents, databases, software, and more can quickly become expensive. A credit management partner can help streamline the entire credit control function while reducing costs.

Improved recordkeeping and documentation: Maintaining records and documents can get difficult for small businesses that do not have the manpower. For an outsourced service provider, it is a standard practice to maintain proper records of all communications and collections. 

Some of the main credit control tasks that companies outsource include:

• Invoicing
• Post invoice verification
• Chasing via telephone, email or fax
• Follow-up for invoices and payments promised
• Dunning letters and statements
• Cash allocations
• Debt collection against previous aged debtors’ report
• Liaising with legal & compliance departments for legal action
• Credit control MIS reports
• Collection by age of the debtor
• Debtors’ ledger review

Some of the usual signs that indicate you should outsource your credit control include:

• Sending invoices late
• Not sending payment reminders
• Using outdated software
• Receiving late payments all the time
• Lack of standardised processes
• Inexperienced staff
• Absence of a dedicated credit control team
• Writing off bad debts frequently

Any business, irrespective of its size, can benefit from outsourcing its credit control function. Although some of the biggest benefits are achieved with larger volumes of transactions, most businesses benefit from outsourcing as it is cost-effective and offers professional expertise, which may not be available in-house, It also enables a business to free up more time and focus on boosting its growth.

No! You will always be in control of your business. A credit management partner will function according to the structure and rules laid out in your business contract. Furthermore, they will customise their services according to your needs. At the end of the day, whether the specialist will take care of the entire credit control function or just a few of its activities are entirely dependent on you. They will not have the final say in your business decisions or strategies.

An experienced credit management partner will have a customer-centric approach to payment collections. The key role of a specialist is to build trust with your customers and encourage them to make timely payments. They will also provide you with regular updates and reports on their activities to ensure you’re in the loop. Additionally, they will consult with you before taking any action against disputed invoices and accounts that might be of concern.

It’s entirely your decision whether you wish to outsource the entire credit control function or certain key activities. We will work with you to provide a customised offering based on your requirements.

Cost saving is one of the key benefits of outsourcing this function. However, the figure will vary depending on the size of the organisation and the number of transactions and vendors it employs. Several businesses have saved costs ranging between 40-60%. Additionally, streamlining processes and improving efficiency adds to your overall savings.