10 min
·
July 18, 2023
No matter what industry they find themselves in, every business must accept one truth.
Time is money.
That’s why it makes sense to examine your processes and figure out where you can trim away some excess time and energy. Invoicing is an area that’s vital to your financial health, which is why so many businesses try to keep it in-house. But what if, by outsourcing your invoicing services, you could cut costs and improve the overall efficiency of your organization?
This question might seem like a head-scratcher. How can hiring an outside service save you money? But trust us, it absolutely can. And that’s what we’re going to show you through the course of this article.
By the end of this post, you’ll understand how invoice outsourcing can reshape the financial health of any organization. If happier customers, fewer outstanding balances, and more money in your pocket sound like something you could get behind, then read on.
Stay tuned for our next article, “Why Small Businesses Need Online Invoicing Solutions,” where we delve deeper into the benefits of online invoicing.
When discussing outsourcing your invoicing services, we mean your accounts receivables. This umbrella term covers creating invoices, sending them out to customers, collecting funds, and following up with customers who have unpaid invoices.
Outsourcing these services means bringing on a third-party organization to manage these services for you. The contractor will create your invoices, send them to clients, collect payments, and follow up on unpaid invoices on your behalf.
Some might see outsourcing this vital service as giving up some much-needed control. But that’s not true at all. In fact, entrusting your invoicing services to a third party can improve efficiency, cost-effectiveness, security, customer service, and even compliance.
In the following sections, we’ll show you exactly how to achieve this.
There are several ways outsourcing invoicing can help the overall financial health of your business. Some of them are very direct, while others are indirect. Outsourcing enriches the customer experience and tightens efficiency, accuracy, and security. Simply put, that means you’ll grow your customer base, close more sales, and keep more of the money you make.
Read on to find out how.
One of the benefits of outsourcing invoicing services is streamlining the payment process. That ultimately saves time and resources, freeing your staff up to focus on other essential tasks.
With global e-commerce sales totaling a whopping $4.9 trillion USD in 2021, it’s clear that online businesses have huge growth potential.
By outsourcing invoicing, companies can effectively manage their financial transactions without getting overwhelmed, guaranteeing that they can maximize profits and continue to scale operations.
Additionally, these third-party invoicing services typically have access to advanced automated software solutions. These tech advancements make sure that the invoicing process goes off without a hitch. That’s due to the automation functions that guide them.
For example, when an invoice is late, someone on your staff would typically need to contact them to receive payment. If they receive no response, you’ll have to send the debt along to a collections agency.
Any hesitation in this process can push resolution back exponentially. You want to make your money and move on to your next big sale. That’s why the automation platforms used by these services can come in handy.
The system can automatically contact customers regarding unpaid invoices once a set time has passed. So, for example, when an invoice is 72 hours late, a payment reminder email is automatically generated, personalized, and sent to the customer.
Then, if two weeks go by with no response, the system automatically sends it along to collections. By removing human error from the equation, you create a more efficient system.
Chances are, you’re already using several automation platforms. That includes CRM, accounting software, payroll software, and email marketing platforms. You already know the effectiveness of powerful automation software. By entrusting your invoicing to one of these companies, you can rest assured that the same efficiency level will manage your accounts receivables.
The idea of hiring a third-party invoicing company might seem on the surface like another added expense. However, you need to think of it in relation to the cost of bringing on another full-time member of your staff.
According to Salary.com, an accounts receivable manager makes more than $97,000 per year on average. Then, to hire them, you’ll need to pay recruitment costs. The average recruitment agency charges between 15%-25% of the recruited employee’s salary.
So tack on an additional $14,550-$24,250 on the low end.
You now have a six-figure expense. Hiring a third-party invoicing firm would be just a fraction of this. The result is that when you collect on those invoices, you keep more of that money as a profit.
You might think that you don’t need a full-time accounts receivable manager on staff when you have other employees who can take on the task. But this leaves you open to high risk.
One of the main areas where a business can’t afford to make careless mistakes is its invoicing and collection services. Customers need to feel comfortable giving you their money, and the first time that trust breaks, it’s nearly impossible to get back.
Entrusting your invoicing to someone on your staff who doesn’t normally handle this delicate process can invite disaster. One careless mistake can torpedo your entire company’s reputation and lose customers for good. That’s yet another reason to outsource your invoicing to an agency.
These agencies live, eat, and breathe the invoicing process. They’re well-oiled machines dedicated to accomplishing this one task. That means mistakes are going to be few and far between. Entrust your invoicing with one of these outsourced companies. It carries far less risk than trying to train a member of your staff to do it themselves.
Let’s continue with the point we made in the last section. These third-party invoicing companies employ experienced invoicing professionals who specifically train in this area.
That means you’re getting the knowledge and experience of several of those $97,000 accounts receivable management professionals at a fraction of the cost. These professionals have seen and done it all in the invoicing industry. That means they know how to handle any issues that pop up and how to best communicate with invoiced customers for speedy fulfillment.
If you’re working with a dedicated invoicing professional on staff, you don’t have a lot of flexibility when it comes time to scale your operations.
Let’s say that business really picks up, and suddenly your invoicing operations are too much for that one person you hired to handle it all. That means you must hire a second invoicing professional. Go back to our section on saving money and double those numbers. That’ll give you an idea of the cost you’re looking at there.
However, you can easily scale your operations up or down with a third-party outsourced invoicing company. Instead of hiring or firing your staff members, you can change your contract with the agency, increasing or decreasing services whenever needed.
You’re still getting those same professionals with the efficiency and risk management we mentioned earlier. But you also have enhanced flexibility to alter those services to fit your needs.
Your outsourcing partner handles invoicing issues for all their clients daily. That means they’ve gotten very good at it.
It also means they make far fewer mistakes than someone from your accounting department who recently trained in handling accounts receivable issues. By using an automated monetization program, invoices can be generated with confidence.
We spoke about trust earlier. It’s important to note that 46% of consumers will actually pay more for a service if they trust your company.
That means accuracy really counts. Sending out inaccurate invoices can lead to a lot of issues.
For example, if a customer receives an official invoice from your company with inaccurate pricing, they might think you’re trying to cheat or scam them. The best-case scenario here is that they assume your business is incompetent.
Working with an invoicing outsourcing partner ensures higher accuracy and increased customer trust. That means, over time, you’ll be able to charge more for your services and generate even more profit. It also means you’ll retain more customers, saving you from having to replace them.
Cybercrime is a serious threat facing businesses that process payments or store customer information online.
So, in other words, just about every modern business.
As of 2023, cybercrime costs businesses more than $8 trillion worldwide. That, unfortunately, makes cybercrime one of the most lucrative “industries” in the world. Nothing can kill the trust of your customers more than a hacking incident that exposes their payment information.
By outsourcing your invoicing and collections to a third party, you can keep the private information of your customers safe. When shopping around for an outsourcing partner, pay careful attention to the security measures they put in place.
Look for a third-party company with advanced encryption that protects your clients’ invoices and payment information. By protecting this valuable data, you’ll also be protecting your own reputation and your ability to retain customers.
When it comes to businesses that specialize in selling online ventures, like e-commerce stores or affiliate businesses, outsourcing invoicing can be a game-changer. By entrusting this critical aspect to external experts, these businesses can focus their energy on sourcing new opportunities and expanding their operations.
That’s especially true regarding customer service operations. When your customer service department isn’t dealing with avoidable invoicing issues, they can focus on more complex problems that require hands-on attention.
Your customer service phone lines will also have less volume, meaning lower wait times and more quality service. Those lower customer service wait times will make your customers happier, resulting in fewer customer service blow-ups.
There’s so much that goes into running a business like yours. By outsourcing invoicing, you can free yourself and other staff members to tackle vital tasks that enrich the customer experience, thereby improving the overall state of CX.
Another benefit of outsourcing invoicing is reducing the risk of late payments.
By letting a professional service handle your invoicing, you can guarantee that your invoices are accurate, timely, and compliant with the latest regulations. You can also take advantage of their expertise in collecting payments and resolving disputes. This way, you can focus on growing your business and providing customer value.
For instance, if you operate in the retail sector, you might want to leverage retail analytics to optimize your inventory, pricing, and promotions. Outsourcing your invoicing gives you more time and resources to implement data-driven strategies that boost your sales and profits.
Invoicing companies are well-versed in chasing down unpaid invoices. They’ve proven and tested tactics used to make sure that you get paid. By outsourcing to one of these third-party services, you’ll see more invoices paid on time and fewer accounts going into collections.
Invoicing is such a crucial task within any business. That’s why you want to make sure that your invoicing process is highly efficient and effective. But it also needs to come at a reasonable cost. By outsourcing these services, you can enlist the aid of talented and experienced professionals while controlling costs simultaneously.
To review, the reasons you should outsource your invoicing services include:
Simply put, outsourcing your invoicing services can control costs, get you paid faster, and improve the overall customer experience. All of these benefits come together to create one all-powerful reason you should enlist the aid of a reputable third-party invoicing partner.
You’ll make more money. And isn’t that what this is all about?
Opting for Billdu for your invoicing needs presents the most cost-effective solution for managing your financial transactions with accuracy and efficiency. Find out why Billdu is one of the most popular invoicing software.
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