We discussed in Part 1 of this series how outsourcing early-stage AR management can improve the customer experience and increase your revenue and now we can dig into understanding your current strategy.
To help untangle the multitude of options you have in designing an early-stage outsourcing program, it is important that you take the time to understand your current strategy:
- What components are flexible and able to be changed? What are not?
- What trends do you see in payment behaviors when compared to key account characteristics?
- What are you currently doing to motivate payment, either intentionally or unintentionally?
- What is the true cost of your internal debt prevention efforts?
- What is the true cost of your debt collection efforts, both internally and externally?
- What customer questions, concerns and complaints regarding outstanding AR do you hear about the most?
The next step is to choose one or more first-party services and consider how they might fit into your current strategy. While some may simply complement your current efforts, others may replace some or all of your current debt prevention and collection efforts. Three basic services that first-party outsourcing partners can provide include:
- Reminder calls placed before the due date
- Reminder calls placed immediately after the due date
- Early-stage collection attempts made through calls, letters and other approved communication methods after the due date but write-off
Once you identify the type of outsourced effort and when it should be implemented during the billing cycle, further considerations and adjustments can be made with your outsourcing partner to define a custom strategy that best fits your needs.
Stay tuned for Part 3 as we discuss in detail the benefits of the outsourcing solutions.