Many smaller businesses don’t think they have the ability to maintain in-house collections. It can be an overwhelming task to take on, considering all of the cash you need can get tied up in invoices if not properly taken care of. However, sometimes all you need is a little push to see the benefits of in-house collections. Armed with the proper guidelines on accounts receivable best practices, you may find that housing your own collections team ends up being the best option for your business. Below are three benefits from taking on your collections in-house.
- Cost Saving
If you’re outsourcing your collections efforts, you’re paying them a portion of each invoice they collect on. Commonly, it can range from 15 percent to 40 percent of the invoice. Now consider that the longer an invoice goes without payment, the less likely you’ll collect on the full amount. You will end up paying the third party AND missing out on a full invoice payment.
- Enhance Customer Relationships
Dealing with customers and their money is a very sensitive topic. Although there are some great companies that you can outsource collections to, there are also some duds. You don’t know how they may end up treating your customers which will reflect poorly on your company, as well. By keeping in-house collections, you can ensure that your customers are receiving the quality of customer service they deserve.
One of the first issues many companies list as a reason they can’t do in-house collections is they don’t have enough staffing available. However, this is not a problem when you have the right tools in place. Using debt collection software can automate majority of the process, leaving you with minimal staffing and time needed. You can learn more about how to correctly staff your in-house collections team here.
In-house collections may seem overwhelming now, but in all reality small businesses do it every day. There are a lot of easy processes that can be put into place, such as set days to invoice, using online bill pay, having standard messaging and defining team member roles. Using an automated debt collection software will help you to keep these processes in order and on time, as well as help you to maintain in-house collections even as you grow.