Outsourcing your company’s credit control – reasons and benefits

by Groshan Fabiola I try to cover as many topics as I can

Successful credit management ensures a smooth business evolution. However, this ideal scenario is more difficult to achieve than it seems taking into account that many business owners lack two important factors, namely resources and expertise. In this case, outsourcing represents an option, but how many business owners actually choose it? Indeed, this type of decision requires a lot of thought because it comes with risks, but it also brings many benefits. If you accepted to give customers products or services in the first place, it means that you considered the fact that some of them might not pay on time or might forget to pay at all. As a business owner, one of your responsibilities is to make sure that your company does not experience financial losses because of that. You are fully aware that non-payment or even late payment could lead to major cash flow issues, which means that you must take immediate action. Particularly for large companies, dealing with invoices becomes a complex and time-consuming process, so how do you handle bad debts efficiently?

For business owners, credit control management is a struggle

Apart from cash flow problems, bad debts represent one of the main reasons for which many small businesses fail. For this reason, business owners should approach credit control procedures with great seriousness. By deciding to opt for in-house credit control, the respective business operator must send invoices to every customer and keep in mind the payment due date, which can prove to be very daunting and overwhelming. Moreover, he should establish a system that will help him keep track of all the details. Consequently, many business owners complain about the awkward situation of having to ask for money while still trying to maintain a good relationship with the customers in question but they know that the more they postpone each conversation, the more it will affect their business. Moreover, every outsourced credit control company can confirm that acting faster is better. If the business owner does not do something about the unpaid invoice, when he finally decides to collect it, the process will be more difficult and the chances of adding bad debts will increase, thus leading his company to bankruptcy. It may sound like an exaggeration, but improper credit control and bad debts truly are factors that cause financial loss in business.

Fortunately, there is a foolproof solution – outsourced credit control

If business managers choose in-house credit control, they have to invest more time and money in staff employment and training than just resorting to an experienced credit control company. By outsourcing credit control, the business owner can focus his maximum attention on everyday tasks that contribute to the success of the company instead of struggling to squeeze in the schedule unnecessary duties related to credit control. Credit control management is a delicate matter. Apart from extensive knowledge, you need the right technology. The process involves juggling with data for writing performance reports. A credit control company has a knowledgeable and experienced team behind that has the ability to use the latest technology and the most efficient analysis methods. A business owner does not have to be a credit controller, especially when he can easily hire a credit controller who is competent and provides guaranteed results. Another solid reason for which a business owner dealing with late or non-payments should choose outsourced credit control is customer satisfaction. If you, as a business manager, direct your full attention towards this one problem, you will no longer be able to handle other crucial matters, such as using your time productively to improve your products or services and offer an excellent customer experience. The main idea is that you should know when to leave an issue to experts, more exactly, when to opt for outsourced credit control.

Credit control companies excellently interblend discretion and professionalism

Regardless of how you look at the situation, the reality is that unpaid invoices can destroy the financial balance of any business. Even more it could put its success into jeopardy. Just think about it: if you no longer have solid capital, how are you going to afford workforce? How are you going to pay for all the operations and procedures within the company? How are you going to continue using the best marketing strategy that brings you so many customers and so much profit? The bottom line is that if you want to control your business financials and avoid poor cash flow, you need a trained team that will reduce the wait for all your rightful payments. Many business owners believe that by associating themselves with credit control companies, they end up with a bad reputation and this negatively affects their company. Well, those business owners should know that this partnership is usually very discreet or confidential. The customers will not even know that they are cooperating with an external team. This is possible because a credit control company, particularly those who stayed in business for years, know how to embrace the values and objectives of the business owner because they understand his vision.

Outsourced credit control brings many benefits, but it also comes with risks

Indeed, outsourcing credit management brings many benefits like a notable reduction in debtor days and improvement in cash flow, which can result in a higher position on the market, an increase in buying power because receiving money faster practically allows you to pay suppliers faster as well as better rating and secure funds. However, outsourcing credit control also comes with a few risks that even though for some business owners do not matter significantly, they still need to be aware of them. One of the risks that must be mentioned is the feeling of not having control over the entire situation. The business owner handles the job to a professional company and draws himself away from the process waiting for the results. The business owner can eliminate this risk easily by ensuring a good communication with the credit management company, which leads us to the second risk, miscommunication. If the business owner does not manage to communicate efficiently with the external team, things will not go smoothly.