What is Credit Control Outsourcing?

What is Credit Control?

Credit control is the process of assessing if customers or suppliers are likely to pay on time. It can also refer to any strategy a business may have in place to manage or maintain the period between when a service is provided or product is supplied, and when the business is paid. This often involves payment plans or calculating risk.

Outsourcing this responsibility means it is handled by an external company, which might be the right option for your business. This article will further explore what credit control outsourcing is and why you might benefit from it.

Why is Credit Control Important?

Having a stable credit control management system in place is integral to ensuring your business’ cash flow remains seamless and reduces the chance of debt. A common pitfall for businesses is poor cash flow, which can be caused by payment delays from extending credit limits to customers. Therefore, having robust measures in place reduces the chance of putting your business at financial risk.

Effectively managed credit control can correlate to success for your business. Not only does it help to guarantee your company is paid and cash flow is continuing, it can also help to maintain positive client relationships and uphold the reputation of your business.

Why Choose Credit Control Outsourcing?

If your business doesn’t have the resources or time to effectively manage credit control, outsourcing this process can be a solution to ensuring your business keeps up with credit control demands.

Access to Experts

Credit control can be difficult to navigate, which is why outsourcing to specialists can give you access to their knowledge and expertise in effectively managing your credit control system. This can shield you from possible strains on your cash flow, reducing the chance of bad debt. Outsourcing to experts also means benefiting from the understanding of customers’ credit history, to help your business to make informed future decisions.

Cost Saving

Credit control outsourcing can save your business the substantial cost of paying the full-time salary of an in-house credit controller, as well as any associated costs of recruitment, training, and HR. Choosing to outsource this process also frees up resources for the organisation to focus on valuable functions such as sales, marketing and more.

Cash Flow

It’s understood that consistent cash flow is imperative to a business’ survival, and credit control plays an important part within this. Ensuring regular cash is coming in efficiently and regularly can contribute to increased profits in the long-term. Outsourcing credit control can reduce late payments, and therefore the risk to cash flow. This is due to the ability of experts who can assess the credit risk of new customers and reduce the time spent chasing debtors.

If you need assistance with your business’ credit control management or have questions about outsourcing your account services, our experts at Ratiobox are here to help you. Get in touch with us today to discuss how we can optimise your accounts.