Outsourced Accounts Receivable Services
Accounts receivable, also called AR, refers to the money owed to a company for goods or services that have been delivered.
These items are often bought on credit and have specific repayment terms.
Money still needs to be collected from buyers, which makes these receivables, in effect, IOUs.
Also, receivables are seen as liquid assets, as they are part of a business’s working capital.
They are furthermore seen as current assets, as payments need to be made within a year or less, according to the payment terms.
Managing these receivables can be cumbersome, especially if one needs to keep track of payment due dates and keep balance sheets in order to ensure overdue accounts are flagged as needed.
Outsourced account receivable management services can easily help a business manage its receivables, which is essential for its financial well-being.
If you are interested in such services, contact our expert team today to learn more about receivable outsourcing.
Our team can connect you with several expert accounts receivables services that can lead to an enhanced cash flow and an improved accounts receivable process.
Also, continue reading for more information on outsourcing accounts and receivable outsourcing services benefits.
What is the role of accounts receivable?
Accounts receivable outsourcing services include tracking expected revenue, collecting money, and assisting in generating and issuing invoices and other financial statements.
Also, outsourced AR teams are skilled in using the latest software to complete tasks successfully, and they can do credit checks as needed to vet clients who want to buy items on credit.
What is accounts receivable vs payable?
Accounts payable refers to monies a company owes to a supplier.
On the other hand, AR represents the money that your customers owe your business.
Furthermore, as mentioned, accounts receivable are also called current assets, while accounts payable are current liabilities.
Can accounts receivable be outsourced?
Outsourced accounts receivable services can be convenient solutions to improving cash flow for businesses of any size.
For smaller businesses or startups, an accounts receivable service can be perfect if no in-house AR department has been established yet.
What is the business process outsourcing accounts receivables?
In its simplest explanation, companies that outsource account receivable services hire a third-party provider to both manage and process their AR.
These outsourced partners can handle anything from the invoicing process to collecting payments that are past their due dates.
What are the three types of accounts receivable?
There are three types of accounts receivable to consider, namely:
- Accounts receivable/trade receivable;
- Notes receivable; and
- Other receivables
Accounts receivable is, of course, monies that are the outstanding payments still owed to a company.
These funds are considered assets when reflected on balance sheets; however, if payments to a company are delayed, working capital, cash flows, and business cycles can be negatively impacted.
On the other hand, notes receivable will include a written agreement where a customer agrees to repay the money and any interest that might be payable.
Other receivables would include interest, salaries, bonuses due to employees, tax refunds, and salary advances.
Can accounts receivable be automated?
Accounts receivable outsourcing services can certainly include automation, and expert teams can use top software applications for fundamental tasks that include data capturing and entering.
These expert teams might also rely on automation as part of their process to update records or generate statements.
The advantage of automated accounts receivable management services is that time and labor costs can easily be reduced.
What are the benefits of outsourced accounts receivable services?
Together with reduced costs, there are several advantages to outsourcing accounts receivable services.
Here are some considerations.
1. Exceptional financial expertise
Managing accounts receivable requires a high level of financial knowledge.
Outsourced teams with the necessary skills and expertise can manage various financial processes, drawing on their experiences to provide exceptional services for businesses.
2. Outstanding customer services
Dealing with client payments requires finesse, especially when collecting payments or making customers aware that they have payments due.
Outsourced accounts receivable services have the experience and special touch to ensure that every interaction goes smoothly, making collecting funds easier.
They can enhance customer satisfaction and easily resolve disputes.
3. Technology prowess that streamlines processes
Because they are adept at using the latest advanced technology in the AR process, outsourced teams can easily manage various AR processes as needed and assist companies with the best possible solutions to streamline every aspect of accounts receivable.
Need more assistance on how to outsource AR for your business?
Contact our team today if you want an accounts receivable service for your business or need more information regarding the process and the benefits that you can expect.
We look forward to hearing from you!
Want Free Accounts Receivable Advice?
Gain Access to our Outsourcing Consultants today
Ready to start empowering your business?
FAQ's
Have a look below for more information regarding outsourced account receivable management services.
Can small businesses use outsourced AR services?
They can absolutely outsource accounts receivable services – and it could be a viable option if you do not have in-house teams that can perform these functions.
Outsources teams can reduce errors, improve cash flow and deliver services to different industries and businesses as needed.
What do account receivable teams do?
These teams assist the finance team of a business in a timely manner to ensure payments are received for any products or services.
What are the main functions of accounts receivable outsourcing?
Outsourced teams will typically play a role in maintaining customer accounts for many businesses.
They will work with leading digital billing systems and use these current systems to ensure that payments are made.
Furthermore, accounts receivable outsourcing will play a key part in ensuring that a business does not lose out on any revenue and that business functions are not impaired due to overdue accounts.
Therefore, outsourcing accounts receivable can be summarized as keeping track of invoicing, collecting payments, and managing cash applications and deductions.
Why are accounts receivable important?
AR ensures that a business and its customers clearly understand when payments need to be made and when these deadlines are.
What are accounts receivable also called?
Another name for accounts receivable is outstanding invoices.
What are accounts receivable?
AR includes any monies customers owe a company for services or products purchased.
These monies are usually collected within a few weeks and recorded as assets.
Are notes receivable considered loans?
Notes receivable can include short-term and long-term notes payable. They are loans offered by a company to customers, with payment due within a specific time frame.
Can accounts receivable outsourcing improve your cash flow?
Thanks to saving companies valuable time, outsourced teams can provide more value by ensuring that clients pay outstanding invoices on time and payments are made according to their deadlines – whether these come from new customers or any existing customer.
When should you outsource accounts receivable services?
Outsourcing accounts receivable allows you to get a better solution for accounts receivable management.