Accounts Receivable is one of the most important parts of your business. It can also be one of the most cumbersome. As a business grows and scales, the volume of invoices and payments increases exponentially. Not only are there simply more of the same tasks, but there are more complicated systems and processes to implement as well. For many businesses, this includes credit accounts and recurring billing. When you add in the inevitable unpaid accounts, this becomes a big job, even for an entire department. It also becomes very difficult to manage, even for the most agile AR managers and directors. At this point, accounts receivable management can help.
What is Accounts Receivable Management?
Accounts Receivable Management, or ARM, is simply the set of policies and procedures around collecting payments. However, it is most refers specifically to sales offered on credit and recurring payments. It also frequently refers to the services offered by outside companies to manage these accounts for the business. This includes everyday billing and payments, but also includes collection on past due accounts and is often offered by collection agencies as additional service.
Why Outsource ARM?
There are many good reasons to outsource all or part of your accounts receivable management. First is simply volume. A good ARM service can take a portion of your tasks off your plate in a way that makes your department more efficient. When you choose to outsource credit accounts, recurring payments, and past due invoices, this gives you more time to devote to crucial in-house processes.
Additionally, ARM services are extremely efficient. Accounts receivable professionals within organizations often have to wear many hats. You have to be skilled and knowledgeable about financial matters in general, but also understand your company and the industry at large. ARM professionals have specialized skills that focus on managing receivables and collecting them efficiently. Because of this specialized and focused attention, you may find that even at a fee, you spend less on your outsourced receivables than you were before. When your staff refocuses their attention on your crucial in-house needs, they are more productive.
How To Find The Right ARM Partner
When you do make the decision to outsource your accounts receivable management, choosing the right partner is very important. Not all services are created equal. So what should you look for in an accounts receivable management service?
- A proven track record. Ask how long the company has been in business and whether they have experience in your industry and with the types of accounts you need managed. If you want to take full advantage of the efficiency of ARM services, you can’t be worried about them playing catch up.
- Culture and customer service philosophy. The accounts receivable management company you choose will become an extension of your business. Your customers will have to call them and interact with them when they have questions about their invoices, to make payments arrangements, and if their accounts go into collections. You want to make sure this company will treat your customers the way you would treat them. Their behavior reflects on you, not them.
- How do they handle past due accounts? While many accounts receivable management services are affiliated with a collection agency, many are not. When you do have accounts that become delinquent, it is very helpful to have the resources and expertise of a collection agency at your disposal. It helps to have the services rolled into one for a seamless transition for customers and for your own convenience.
Southwest Recovery Services is a Trusted ARM Provider
Did you know that Southwest Recovery offers accounts receivable management services? Our experienced staff is skilled and efficient at managing receivables in many industries. In the event that any of your customers do fall behind on their accounts, we are ready to represent you with kindness and fairness. Do you want to learn more about how we can help your accounts receivable department run more smoothly? Get in touch with us today!