Why You Should Start Outsourcing Accounts Receivable
POSTED ON May 24, 2023
BY Mallory Sage

Does it take ages for you to get to invoicing your clients? Are you having trouble communicating expectations with clients? Do you feel like your receivables are getting out of hand? It may be time to think about outsourcing accounts receivable.

There are many reasons outsourcing is beneficial (read about those benefits here), but let’s dive into why accounts receivable may be the help you need most.

What Is Accounts Receivable?

Accounts receivable (also known as AR or just “receivables”) are the invoices that your clients owe you for products or services your company provides. Different types of receivables may have different service terms. For example, you may bill a customer immediately following a service or, for a large order or hold, you may request a deposit before the final delivery.

Why You Should Consider Outsourcing Accounts Receivable

  1. Focus on relationships. It’s very important to create a level of separation between yourself as the service provider and the discussion of money. This is particularly important in the service industry. You want clients to associate you with the service you provide, not with the cost of the service. Outsourcing accounts receivable means you have a dedicated team that handles the discussion of money for you.
  2. Develop a system and structure. Having a solid structure for processes like AR is key to the growth and development of a business. Even if your goal isn’t to grow your business, having a system in place sets your client’s expectations and builds confidence in your business.
  3. Reduce your receivables cycle. Does you AR cycle take 30 days? 60 days? 90 days? Outsourcing accounts receivable can reduce that cycle and help ensure that invoices are paid faster. This means a more stable cash flow for your business. Stable cash flow is key to success, especially for small businesses.

Outsourcing Accounts Receivable with Encurio

  1. Discovery. If you’re a new client or an old client looking for more relief, discovery is a vital part of the process. During discovery, we’re looking to find a deeper understanding of your accounting up to this point and a complex understanding of your business as a whole. What is your revenue cycle? How do you deliver invoices to clients? What terms do you extend to your customers?
  2. Structure. Do you already have a process in place for receivables or are you starting from scratch? Either way, we help you develop a system to improve your cash flow AND your client experience. This may take time, as no process is perfect, so we collaborate with you to make changes.
  3. Communication. To appropriately manage your AR, communication is essential. Because we are communicating with YOUR clients on your behalf, we need to understand your company culture. When we talk to your clients, it should feel like YOU are talking to your clients. We’re going to have a lot of questions, especially at the beginning of the process, so be prepared to talk to us – like, a lot.

What’s Left On Your Plate

  • Time. Because we need an in depth understanding of your business, expect to devote a lot of time to this process. This can often be an emotional process, because these are your clients. You’re passionate about them and their care – and so are we. Create space for us to learn from each other.
  • Trust. For outsourcing accounts receivable to work, you have to be able to let go of some level of control. We need you to trust us enough to give us the authority to handle these processes -and we will show up for you with accountability and communication.
  • Communication. Keep up with questions as we ask them and let us know if something changes on your end.

Worth the Time and Energy

The process of outsourcing accounts receivable may seem daunting, but what’s waiting on the other side is relief! Once you take the time to build a process for AR, the receivables process will run smoothly and give you time to focus on the parts of your business that you love.

If you’re ready to take the leap into outsourcing accounts receivable with us, consider setting a meeting to see what the transition will look like for your business.