How to build an effective account receivable outsourcing strategy?
Organizations are using outsourcing effectively and efficiently as an important strategy to reduce costs, prioritize their business needs, and focus more on their core competencies.
Outsourcing strategies have evolved from cost-saving practice to a long-term approach to improving operational efficiency. The field of AR outsourcing includes various areas of business processes ranging from HR and payroll, accounting, accounts receivable / accounts payable, software development, customer support services and contact centres.
Strategic Account receivables outsourcing helps organizations to:
- Convert a variable value to a fixed cost
- Enter new markets
- Be flexible in business change
- Make your competitors smart
Your strategy may be based on three commonly used outsourcing models:
- Managed Services (Special Team with Outsourcing Partner)
- Build – Rate Pert – Transfer (BOT)
- Pay as you go
- Powered services
1. When you need control over outsourced activities
This may include a close coordination between your office fee and offshore center. Your outsourcing partner should be able to set up and manage a dedicated center for you. It may involve deploying some resources to facilitate the transition of work. There will be a nominee and senior manager for each role to be employed and to manage the day-to-day operations.
2. When you want to set up a wholly-owned subsidiary offshore Center
This is a preferred method, if you want to establish your own center, but want to see if it works well before making a final decision. There are outsourcing partners who are able to set up and run offshore centers on your behalf and accept full or partial responsibility after some time. (Usually 2-5 years).
3. When you want to use cost effective offshore resources
Go for this method when you just want to run outsourcing projects on time, possibly at a fixed price. Domains are skilled outsourcing providers and can take their projects quickly. It is especially suitable for time bound projects like web designing, software development projects. Although all three have different models of outsourcing models, there is an opportunity for this and sometimes, uniquely different mix and match.
What’s the account receivable process?
The process of receivable accounts begins when products or services are provided to customers on credit. A company generates an invoice that details the transaction, including the total amount and duration of the company. The movement is then recorded.
If payment is due on time, the receipt process is complete. However, this does not happen often. That is when the Debt collection Service India department is in charge. First, the customer is given the opportunity to explain the delay. If there is a complaint regarding products or services, the matter is forwarded to the concerned departments. The process ends once the problem is resolved and payment is received. Sometimes if the process is shown to be defective or does not meet customer expectations, the process will end, at which point the loan can be terminated or reduced. He will not be able to represent you or your company.
Some companies prefer to hire an outsourcing firm that can be received. These companies handle the process of collecting outstanding payments on a commercial basis. A certain amount or fee is charged for successfully completing the collection process. In some extreme cases, the customer becomes insolvent and cannot repay if the loan is transferred from the receiving account to a bad debt account.
A bad debt account will be on record, but the company will never be able to repay the loan. Some are lost due to debts, and that loss must be deducted so as not to damage the system. By partnering with Debt Nirvana, you can choose one of these models. With our prominent debt collection services, we will work closely with you with our local presence in the US, UK and India and help build your account receivable outsourcing strategy from scratch. We can share our experience and case studies of successful outsourcing engagements equally.
