Selecting the Ideal Accounts Receivable Outsourcing Partner

As a critical stakeholder in the accounting department in your organisation, one of your key responsibilities is also to bring about financial transformation. But this transformation shouldn’t come at a cost and must be implemented from the prism of cost optimisation across all departments, including finance and accounting. The key to achieving business transformation is making sufficient and sustainable investments in people and technology. But this comes at a cost.

Let’s look at the cost problem from the perspective of accounting. The accounting industry in the UK is suffering from a skills shortage; therefore, companies have to pay more to hire the best accountants. They even have to loosen purse strings for junior accountants. And, of course, this is only if they can find such talent in the first place. But even if they do, they aren’t out of the woods yet. Once they hire people, companies must invest in IT to support the growing needs of the business and ensure personnel are working with the right accounting technology. According to Gartner, IT spending in the UK is set to surpass that of Germany and France, putting into perspective the increasing reliance of organisations on IT and the fact that they are spending more on it to realise business transformation initiatives.

There are no easy answers to realising transformation goals. Still, one popular answer for achieving business process transformation by increasing capacity, thus driving scalability, and achieving tech-led accounting transformation is outsourcing. When it comes to finance and accounting, leveraging accounts receivable outsourcing services is an excellent way of realising the true potential of your finance and accounting department.

If you decide to outsource, you must choose the right partner. This is a challenge because:

There is a problem of plenty when it comes to accounts receivable outsourcing providers
Most try to pitch lower costs as their USP, which becomes a very attractive proposition
Business decision-makers are prone to thinking of outsourcing from a cost perspective only and, therefore, zero in on a provider quoting the lowest rates
Inability to think strategically when it comes to outsourcing to see it as a way to improve the overall efficiency of accounts receivable rather than a cost-reduction procedure

Considering the nature of the outsourcing decision, it is doubly imperative to choose the right outsourcing services provider.

How do you choose the right outsourcing partner for your Accounts Receivable?

Many companies offer finance and accounting outsourcing services, but choosing the right one is a real test. You must evaluate the provider on various parameters to make the right choice. Let’s take a look at the top 3 parameters:

Alignment of Mission, Values, and Work Philosophy

The work culture, environment, motivation, and many intangibles drive efficiency within a team. While it is too much to hope that your company will share all values with the outsourcing providers, you need to ensure that the provider leverages many of the same motivational triggers as you and their measure of success are aligned with the success metrics measured by your company.
The focus is on finding a provider whose mission and vision are the most aligned with your organisation, ensuring that your way of working is not far different from that of the provider. This ensures better alignment wherein your outsourced accounting department can act as a seamless extension of your in-house team.

Evaluate the Talent

This is an often-ignored aspect of choosing the right outsourcing provider. Stakeholders are so fixated on saving money that they are willing to compromise on the quality of the accountants who will work on the accounts receivable project. This is where accounts receivable outsourcing can lose its strategic value for your company. The age-old cliché, ‘an organisation is as good as its people’ is also true for outsourcing. The right outsourced talent can play a huge role in enhancing the productivity of your accounting department and usher in better efficiency through better skill sets.
Don’t fall for some of the common misconceptions around outsourcing that say it typically has to make do with subpar talent. Reputed outsourcing providers are very particular about the skill sets of their accountants and knowledge and only hire accounting personnel with varying years of experience and diverse skill sets. So, conduct a thorough evaluation of their knowledge, talent, and the hands-on experience in accounts receivable that they bring to the table. Ask for their bios and interview them based on their expertise. This way, you can ensure your outsourced team of accountants has the talent your accounting and finance department deserves.
One of the critical determinants of talent is whether your outsourcing providers have a demonstrable history of working for UK businesses. If they do, they can be the right choice.

Accounts Receivable Outsourcing Services Tools & Infrastructure

It is a given that a leading provider of finance and accounting outsourcing services will work out state-of-the-art infrastructure and use the most advanced accounting software and systems. But is the provider capable of using the same technology you already use? You must answer this question; otherwise, a technological non-alignment might result in non-standardised processes, resulting in duplication and errors.
But don’t limit yourself to accounting technology only. Please find out about their backup and disaster recovery plan. Make sure they have a plan B in place to manage any emergency. Also, ensure they have stringent data security protocols that meet GDPR compliance, at the bare minimum. If your business practices demand compliance with other industry-specific regulations, find out whether they comply with the same.
The best outsourcing providers are technology-agnostic and flexible enough to work with your existing ERP and not confined to a collection of proprietary software.

How to Evaluate Outsourcing Service Providers?

Asking the right question is critical for evaluating finance and accounting outsourcing services providers. However, you must dig deeper to work with the best. If you are looking for the right talent, work with providers who will themselves understand your requirements, analyse them, and present accountants who are well-versed with the accounts receivable nitty-gritty of your business’s specific domain. Also, evaluate these skill sets based on specific tasks. Many providers give you a certain number of free hours to test the mettle of their accountants. Take them up on their offer.

If the provider says they confirm with industry-specific regulations, don’t take their word for it. Ask for certifications, and as most of these are time-bound, ensure the certification covers the time you will be working with the provider. Also, ask for client references. This can be difficult because providers sign comprehensive NDAs forbidding them from talking about clients or promoting their association with them. But you can ask informally, and you might get an answer.

Choosing Between Equals

The choice can be confusing, especially when a few outsourcing providers meet all your criteria and offer cost-effective scalability but do not compromise on quality. In such cases, you might even want to visit their outsourcing facility. Or, you might want to make a judgment call based on certain specifics such as the availability of a single point of contact or a project manager at all times, their capacity to offer more strategic financial services such as planning and analysis, level of transparency, and more.

With QX, your choice of accounts receivable outsourcing services provider becomes simpler as it has notched a successful track record of delivering personalised F&A services, including accounts receivable through its global delivery centres. It leverages a people, process, and platform approach to drive finance transformation across a growing number of clients in the UK.

Originally published Oct 30, 2023 06:10:07, updated Mar 26 2024

Topics: Accounts Receivable Process, Finance & Accounting Outsourcing