For a company that sells on credit, the accounts receivable financing portfolio is one of the largest assets. However, often accounts receivable management area of asset is not given due importance or care. In a survey carried out among companies, more than 40 percent revealed that they do not follow through on policies, procedures, or performance targets. It was found that most of those companies do not have enough work forces to focus on this issue. To outsource the task of accounts receivable management is an ideal option for firms selling on credit.

A company can outsource all or a part of its account receivable business functions. Typically the functions which can be outsourced are:

• Quantum of outsourcing accounts receivable at a given point of time
• Accurate keying of Sales Invoices on the basis of supporting documents like purchase orders, details of vendors, terms of payment etc
• Ageing of Receivables
• Ensure timely collections and accurate application of payment to the customers accounts
• Track and resolve delinquent accounts
• Ensure timely and accurate reconciliations of vendors
• Maintenance of customer database
  
  • Risk ascertainment and analysis of credit worthiness
  • Customer history maintenance
  • Creation of new customers or modification of existing customers
  • Ensuring of appropriate documentation base before adding up a customer

• Up to 30% to 50% annual A/R processing cost savings without capital investment. The company usually gets the best service at a lowest cost from the service provider.
• Improving cash flow
• Eliminating postage and material expenses
• Increasing revenue by providing cross-selling/up-selling opportunities
• Increasing Return on Investment (ROI) for marketing programs
• Reducing calls to customer service
• Improving customer retention and relationships by building brand
• Reduction in bad debt
• Utilization of advanced technology
• Better control over accounts receivable management