DATE POSTED: 11/15/2012

Many owners of small businesses find themselves managing their own Accounts Receivable collection and Accounts Payable processing, or delegating employees to do it instead of focusing on their primary roles. Valuable and scarce human resources being spent on tasks that have an indirect relation to the company’s products or services is a position that is undesirable by businesses.

Outsourcing your A/R collections and A/P processing enhances the efficiency of your accounting department because of a quicker turnaround time. Choosing to outsource your accounting functions can also avoid the turnover risks that businesses face when having in-house resources perform said processes.

Outsourcing Restores Focus on the Essentials

The justification for outsourcing A/R collections and A/P processing lies in restoring your focus on the essentials of your business. To achieve the greatest profitability, you’re best served by focusing, as much as possible, on value-added, high-margin, growth-oriented activities—not on mundane administrative tasks.

Employees are significant investments for SMBs—wages, taxes, workers compensation insurance, and unemployment insurance, not to mention any benefits you provide. There’s also the physical space required for employees to work in. However, the last thing SMBs looking to stay lean and mean need to do is to tie themselves to labor and facility cost that could be avoided by turning to a service provider that could do the job better.

Of course, no business can grow much without hiring new employees—but when you make that investment, you want to hire people who add to the company’s worth. But businesses should also consider that tasks that somebody else can do better can be outsourced—usually less expensively than hiring someone permanently to do it.

Focus your efforts and those of your employees on the businesses strategy and development, and leave the routine business functions to providers who specialize in those functions.

Outsourcing Providers Provide Greater Productivity

A/R collections and A/P processing could be integrated with other business processes, but accounting does not have to be in-house for that integration to occur. In fact, because outsourcing guarantees uninterrupted service and results in greater standardization and reliability, outsourcing of accounting functions usually helps in improving your other tasks.

To guarantee a significant improvement on quality and productivity, you should be partnering with an ISO-certified outsourcing partner. It is a standard procedure for ISO-certified outsourcing companies to have proper documentations of processes, either designed by the service provider or the client. This helps ensure that there is only a minimal, if not elimination, of any knowledge gap.

As expected, vendors only hire the best group of qualified individuals to conduct your business and to strictly enforce quality assurance processes which can lessen the burden on your end when it comes to checking data accuracy.

That should not be surprising—you are, after all, making the decision to turn over your A/R collections and A/P processing to a company that has accounting as a core competency. By hiring a trusted outsourcing partner, you will not only be freeing up your company’s talent to focus on what it does best, you’ll be taking advantage of our economies of scale and expertise, which outsourcing companies utilize to offer higher-quality service at less cost than in-house options.

Author: Outsourcing Insider

Outsourcing Insider consists of a team of regular blog contributors who writes topic about outsourcing and its relation to other industries like social media, finance, healthcare, sales and marketing, contact centers, and data and research.