Fix Them with Credit Management Group
Most businesses don't realize the extent of cash that is trapped on the balance sheet in the form of accounts receivable. Freeing up the cash through efficient credit management operations can result in optimized working capital.
While most businesses have formal credit management policies that dictate terms of payment, invoice due, and collection date, not all businesses enforce the policies effectively, resulting in mounting bad debts.
In a bid to boost sales, many businesses ignore credit management best practices. As a result, they stack up bad debts and face financial problems. The blame for bad debts rests with inefficient internal operations instead of customers.
The solution to the problem is to let a professional firm such as Credit Management Group handle your accounts receivable collection tasks.
Why Hire a Third-Party Accounts Receivable Collection Firm? A third-party accounts receivable collection firm can improve the credit management process. Here are some of the ways outsourcing the accounts receivable task can result in improved internal operations and an enhanced cash conversion cycle. Efficient Collection Process -An overwhelming amount of work is required to collect a single invoice. Accounts receivable is not just an accounting function. It is a strategic function that can have a direct impact on the company's profitability. An improvement in the collection process can have a positive effect on the entire organization.
1. Efficient Collection Process - By hiring a third-party accounts receivable collection firm, you can double the efficiency of collecting accounts receivable without hiring additional employees. The firm will utilize its expertise to resolve disputes by calling customers, sending gentle reminders, and following up with credit customers.
2. Maintain Customer Loyalty - An expert accounts receivable collection firm will make sure that the interaction with customers is positive. The firm will utilize tactics to gently remind the customers to pay back the amount due.
Every effort will be made to turn accounts receivable into cash while maintaining good relations with the customers. This will help in keeping customers satisfied and turning them into repeat clients of the business.
3. Improved Customer Service - The process of credit collection should be viewed as a customer service function. This is because of the way you contact the customer to pay back the amount due will have a bearing on the customer's perception of your company.
At every stage, the focus will be on positive interactions even with the most irritating customers. Hiring the services of the professional firm will be an extension of customer services with a focus on getting customers to pay back quickly.
4. Integrated Collection Process - Experienced credit collection firms such as Credit Management Group have an integrated debt-collection process. The integrated approach optimizes credit collection operations and minimizes the risks of bad debts.
5. Efficient Internal Operations -A credit collection company will take care of the entire process, ensuring quick recovery from customers. You don't need to invest in training the internal staff or purchasing costly accounts receivable management software. Outsourcing the task to a third-party will lead to improved and efficient internal operations.
The additional cash generated due to efficient credit management operations can result in increased liquidity, reduced debt levels, and improved profitability. With a strong cash position, a company will be able to take measures to strengthen its competitive position.
Let Credit Management Group help you improve the internal operations and boost the credit collection process. To know more about our unique accounts receivable collection process, you should dial 215-845-5040 today.