Benefits of outsourced credit management
According to statistics, three-quarters of small businesses have had late payments in the past twelve months. Some businesses state that one-third of all invoices sent are paid late. This silent killer of businesses needs to be better managed as late payments can result in poor cash flow.
However, managing late payments is challenging for many organisations. They just don’t have the staff to dedicate to such operations. As such, about two-thirds of small businesses have written off unpaid invoices within the past year. About 20% of these businesses have written off more than £5,000.
This is where outsourced credit management can help. So, what are the benefits?
1. Free up time of your staff
Chasing payments is not productive for your staff. They should be servicing your customers and offering the best experience to them. It is also an additional cost to your business to have your staff constantly chase late payments. This can result in a net loss for your company having to chase those payments.
2. Get expert credit management
Unless you’ve hired a professional credit controller, there is little chance that your staff aren’t going to be experts at credit control. Those who have trained and have experience are able to collect late payments quicker and at a lower cost, which is what you get when you outsource credit management.
3. Improve morale
One of the most demoralising tasks within a company is constantly chasing late payments. This can have a knock-on impact on other operations in your business. This could result in your staff giving poorer performances to other customers.
4. Have a professional credit management profile
Staff without the necessary training might not follow the best, professional credit management processes. This can come across as unprofessional and, as a result, damage relations between you and clients that you might want to keep despite their paying behaviour.
5. You can get good advice on how and when to escalate late payment claims
Sometimes you need to escalate claims for late invoices. However, without experience or knowledge, you might know when this is applicable. You might then do it too soon, or too late to properly resolve the issues. A professional credit control team can help you know when the best time is to escalate the process.
An outsourced credit management team is the best way to prevent your business from having cash flow problems. They will ensure late payments are collected as quickly as possible with little hassle to you. Therefore, you and your team are free to concentrate on building your business.