8 Ways An Outsourced Credit Control Company Can Optimise Your Cash Flow

A healthy cash flow is critical to the success of any business, which is why it’s shocking how some businesses end up neglecting their credit control function altogether. Irrespective of the size and industry, it becomes extremely important for rapidly growing businesses to setup an efficient credit control system.

When done correctly, an outsourced credit control will help your business save time, enhance cash flow, and become cost-effective. However, deciding whether you should outsource your credit management function or not is tricky, especially if you’re unsure of what to expect in terms of returns.

So, let’s take a look at eight reasons why you should consider outsourcing credit control for your business.

1. Better cash flow: Undoubtedly, this is the best benefit of an outsourced credit control. It’s difficult to run a company effectively without healthy cash flow and constantly awaiting payments. This is where a third-party credit control agency can prove to be extremely beneficial. They will speed up payment of invoices, increase profit and working capital, and aid investment in growth.
2. Cost savings: Finding and retaining dedicated, onshore credit controllers can prove to be both difficult and expensive for businesses. Further, utilising existing employees to chase payments can drain onshore resources and take the focus away from key business initiatives. Working with an external credit control company allows businesses to keep a track of their cash flow while eliminating the cost of recruiting and training full-time employees. Furthermore, by outsourcing your credit control function, your employees can focus on other critical business functions and become more productive in their day-to-day tasks.
3. Expertise: Outsourcing credit control will give you access to a range and depth of expertise that may not be possible in-house. A third-party credit control company with a great track record and industry experience can add enormous value to your company. To add to that, a reliable partner also broadens the horizon in terms of talent pool and allows you to build a global team of trained professionals.
4. Greater efficiency & Reduced risk: Third-party credit control companies tend to have defined and effective processes in place, which ensures on-time payment of customer dues. With time, customers get used to the system and may even proactively pay on time. Furthermore, outsourcing your credit control function will enable your business to reduce bad debts. As experienced credit controllers take over the process, it’ll also enable positive relationships to grow between the business and its customers.
5. Decrease bad debt: Sometimes, in spite of your best measures, there will be customers who will not pay you on time. In such a situation, an effective credit control agency can implement a pre-determined escalation process to ensure that you are paid promptly. In cases where legal action is required, the agency can play a key role in assisting with the legal process and helping recover your aged debt.
6. Lower stress: Taking on a mammoth task like credit control management on your own can be extremely stressful. With an external credit control agency in place, you’ll be able to better look after your customers, oversee the business, obtain sales and strategise further. Additionally, the external agency will also advise you on the credit worthiness of new customers, the risk they might bring, and what payment terms you should allow.
7. Maintain healthy customer relationships: Customer relationships should not be strained while attempting to collect dues owed to a business. A professional credit control agency will ensure that your customers pay promptly whilst receiving excellent customer service. Furthermore, they will also deal with outstanding queries professionally and efficiently, which in turn will improve customer satisfaction and speed up payments.
8. Gain flexibility: It’s common for businesses to experience periods of peaks and troughs. In fact, many sectors go through seasonal variations. In such instances, employing an external credit control agency can be beneficial to the business. Outsourcing will allow your business to specify the level of weekly resources to be assigned to the service. Further, certain agencies will also allow your business to alter the scope of the function so that they can absorb additional tasks from in-house staff.

How QX Helps

QX is UK-based finance and accounting outsourcing service provider with rich experience in streamlining credit control for our clients spread across industries & geographies. Ever since its inception in 2003, QX has continued to leverage best practices, process excellence and intelligent automation to optimise cash flows for recognised players in industries like recruitment, student accommodation and manufacturing amongst others.

Speak with our experts to know more about how QX can help streamline credit control for your business and deliver customised solutions to meet your specific organisational needs.

Originally published May 25, 2021 11:05:18, updated Jan 29 2024

Topics: Credit Control Process