Managing the Accounts Receivable (A/R) processes is straightforward when your business is in the early stages of development and growth. However, as you expand your suite of services or products, managing outstanding invoices and collecting payments from clients can become tedious.
Fortunately, you can take the hassle out of A/R by taking advantage of accounts receivable outsourcing services from Finlyte.
First, let’s review four common A/R challenges growing businesses often encounter. Also, take a look at the potential advantages of outsourcing your accounts receivable processes so that you can receive payments faster.
4 Common A/R Challenges Faced by Growing Businesses
Every company’s growth journey is unique. Some experience slow, steady growth, whereas others explode virtually overnight. Regardless of which path your company is on, here are four universal A/R challenges you’ll likely encounter along the way.
1. Excessive DSOs
“Days sales outstanding,” or DSO, is a metric that tracks the average time your company takes to convert a credit-based sale into cash. If your DSO is excessively high, your clients aren’t paying invoices in the agreed-upon time frame.
Several factors can drive up your DSO rate. One potential cause is an inefficient invoicing process.
For example, imagine you allow your clients to make purchases on credit but can’t send immediate invoices due to inefficient A/R processes. In this scenario, let’s say it takes between 3-5 business days for your team to send invoices manually.
Whereas you may expect payment within 30 days of the purchase date, your clients might believe they have 30 days from when the invoice is received. This discrepancy can interfere with your cash flow and push your DSO rate above the industry average.
2. Disorganized Ledgers
By keeping your ledgers organized, you will always know what’s going on:
- Who owes you money.
- How much they owe.
- When payment is due.
Conversely, if your ledgers are disorganized and poorly managed, you can lose sight of outstanding debts. This lack of visibility makes it nearly impossible to keep track of A/R processes, much less collect what’s owed to you.
If you’re not already paperless, you should be. Going paperless will save your staff countless hours weekly, clear up unnecessary office clutter, and help you improve A/R visibility.
3. Friction Between Your Business and Customers
Billing disputes are inevitable. However, they should be a rarity, not a weekly occurrence.
Unfortunately, billing disputes can become the norm when your accounts receivable processes get out of hand. These disputes can cause customers to lose faith in your company and may cost you repeat business.
4. Unstable Cash Flow
Stable, consistent cash flow is critical to the success of your business, especially during times of growth or expansion.
When your A/R processes become inefficient and chaotic, cash flow will become unstable and unpredictable. This instability can hinder your ability to grow and may even pose a risk to business continuity if it goes unchecked.
Digital accounts receivable management tools will help you keep a close eye on cash flow. You can use the insights gained from these technologies to address any cash flow concerns and protect business continuity proactively.
Benefits of Accounts Receivable Outsourcing with Finlyte
Did any of the above issues sound familiar? If so, it’s time to consider leveraging Finlyte’s accounts receivable outsourcing services.
Allowing an experienced third-party entity to take over your A/R management processes can help you in the following ways.
Improve Cash Flow
Creating and maintaining a strong cash flow should always be at or near the top of your company’s priority list. Cash flow keeps the doors open, allows you to continue paying your staff, and enables you to explore growth opportunities.
Outsourcing A/R improves cash flow by eliminating friction during the payment collection process. Finlyte’s accounts receivable team will ensure that your clients promptly receive invoices for services rendered so they can settle outstanding debts in a timely manner.
Streamline A/R Processes
Finlyte and our accounts receivable experts specialize in modernizing A/R processes.
We’ll implement leading-edge technologies that maximize A/R process transparency, meaning you’ll always know exactly how much you’re owed, who owes it, and when invoices are due. We’ll also ensure your clients understand your expectations regarding repayment timetables, billing processes, and credit-based purchasing limits.
Finlyte’s A/R process management services not only reduce hurdles to debt collection but can also save you money.
Our team can manage your A/R processes quickly and efficiently so that your team can focus on other critical matters. As such, we deliver measurable cost-saving benefits while helping stabilize your cash flow.
Enhance Client Relationships
When providing A/R services, our core goal is to remove roadblocks from the process. We want A/R management to be seamless for both you and your clients.
We make A/R management effortless for your business by taking over all accounts receivable tasks. We also establish clear, open lines of communication with your clients and adhere to transparent billing practices. This approach builds trust between your business and its valued customers.
By allowing Finlyte to transform your accounts receivable processes, you can develop lasting, mutually beneficial relationships with your clients.
Ready to Get Paid Faster and Improve Collection Processes?
Take advantage of Finlyte’s accounts receivable outsourcing services:
- Stabilize cash flow.
- Improve profitability.
- Optimize your A/R processes.
We can take over a few critical tasks or your entire A/R function as part of our outsourced accounting capabilities. That’s right – we can handle everything from generating outbound invoices to tracking outstanding payments.
We’ll eliminate inefficiencies from your accounts receivable processes so you can focus on more important things, like providing your clients with exceptional products and services.
Schedule a consultation with Finlyte today to learn more about this excellent opportunity to outsource your accounts receivable process.