Getting on top of your credit control can often feel like running on a treadmill. You’re always exhausted but never seem to get anywhere.
Credit control – or cash flow – is an essential service and a critical part of ensuring that your business is operating at its optimum. But you don’t want your credit control services to detract from your value-driven services, nor do you want to start alienating customers!
That’s why an outsourced credit control service is preferable. Here’s what you need to know.
What are outsourced credit control services?
Credit controllers are the people in your business responsible for managing your debts. This includes coordinating debt with existing creditors, managing new credit requests, and basically managing all money owed to your business. Instead of performing all these time-consuming tasks in-house, many companies are looking at outsourced credit control services.
What does outsourced credit control entail?
A variety of credit control services will provide you with a range of duties, all included in the monthly fee. Some of the services you look for include:
Invoicing
Your credit control team will work on your behalf to invoice customers and liaise with them directly. They will keep a professional and polite tone so as to ensure a great working relationship and repeat business.
Debt collections
The team will also be responsible for all overdue debt, negotiating payments and payment plans on your behalf.
Integrated software
Your credit control team will also integrate specialised software into your system so you can access all outstanding invoices and reporting data while remaining in control.
What are the benefits of outsourced credit control services?
Anyone who’s run a business understands the hassle of credit control and the impact it can have when not done correctly. Credit control software allows you to outsource the rigorous demands of invoicing and monitoring outstanding debt. Here’s what you can look forward to.
1. Improved cash flow
By having a team dedicated to securing payments from customers, you’re reducing your cost of borrowing and increasing profits. You’ll quickly be able to see the improvement to your cash flow through the effective running of operations.
2. Reduce bad debt
The longer a debt remains unpaid, the more likely it becomes that it will not be paid at all. An effective credit control function will use an escalation process to ensure that you are paid as a priority. In contrast, a weak credit control approach will leave your invoice at the bottom of the pile, with an increased probability of it becoming a bad debt.
3. Better customer relations
Understandably the primary role of a credit control team is cash collection, but they can actually play a major role in improving customer relations. Scheduled check-ins in combination with friendly and polite messaging create stronger relational bonds with customers. In many cases, outstanding payments are related to further enquiries customers have about the services offered. By connecting with your credit control team, your customers are able to actively engage and clarify any concerns they might have.
The more satisfied your customers are, the faster the payment process will be.
4. Better time management
Although most of your credit control responsibilities are behind the scenes, they can take up a lot of a business’ time which - frankly - could be better spent elsewhere. When a business is not managing its time effectively, it’s ultimately the customer that pays the price. Credit control outsourcing allows you to not only convey a more professional image to customers but also ensure they receive the best service possible.
5. Redirect business focus
We’ve seen that the time spent on credit control services is time not being focused on core business operations. With better time management, you’re able to deep dive into more profitable activities. In-house credit control roles are notorious for high staff turnover which means time is spent searching for, interviewing and training new staff. This time can certainly be better devoted to income-generating activities, enhanced customer service, or fresh business ideas.
6. Improved debt recovery
Whatever business you’re in, there are just some customers who won’t pay on time or who will try to avoid paying altogether. The best way to guard against bad debt is through an outsourced credit control operation. Any sort of deficit in your credit control team will leave you with a massive backlog and accumulation of unwanted debt. With an outsourced team, there’s no issue with staff absences so someone is always on hand to assist. They will continue to pursue even really old outstanding debt, and follow the formal debt recovery processes where necessary.
7. More flexibility
The past few months have shown us that a sharp decline in operations can happen at any moment, and businesses need to be flexible to keep afloat. If your company is experiencing an economic downturn, staff recessions are inevitable, which may have an impact on your credit control team. By outsourcing, you’re always benefiting from a fully capable team and can enquire about scaling down – or even scaling up services – where necessary.
8. Expertise on hand
If you want something done right, you simply have to rely on industry professionals. And so it is with credit control. By outsourcing this operation, you’ll be partnering with a fully qualified team of professionals dedicated to securing your outstanding cash with a customer-focused attitude.
This is quite a delicate balancing act and it takes real expertise and experience to get it right. It allows you to continue communicating without relying on company resources and becomes an extension of your existing team. A professional agency will not only seek out the best staff but will also provide them with ongoing training. This ensures they’re at the top of their game at any time.
9. Access to the best technology
In addition to professional help, an external credit control agency will provide you with access to the latest technology available, installing credit control software that integrates with your system. This allows you and the team to keep track of all invoice payments, allowing for the appropriate amount of time to chase up outstanding fees. You also don’t have to worry about the cost of such software or the time dedicated to training the staff. This is all done for you.
10. No more stress
Running a business is stressful enough. You don’t need the added stress of having to chase down unpaid invoices and risk damaging customer relations. Get rid of the administrative stress of credit control by handing this responsibility over to professionals.
Why outsourced credit control is worth the money
In addition to all the above-mentioned benefits of partnering with a credit control agency, you’re going to be saving money. The improvement in cash flow and reduction of debt are just some of the financial benefits of an outsourced service. You also have to factor in the savings when not having in-house staff. You can also expect a reputable agency to take into account your business needs to ensure that you don't overpay but gain the full benefits - including reduced costs!
Why Chaser is the right fit
Chaser is a leading credit control agency helping a number of leading organisations chase down payments and improve working relations.
Chaser’s customers get paid 16 days sooner, on average, than competitors, saving you more than 15 hours a week on credit control management. Their integrated payment portal allows customers to pay invoices directly from payment reminder emails, and they use personalised reminders sent automatically to chase outstanding debt.
Contact Chaser today to find out how they can improve your business!
