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Credit Management

Five Advantages for your Company

BASIC thinking, 24 November 2020: Professional receivables management represents a major challenge for many – often small and medium – companies. Particularly amid the rapid growth of the e-commerce sector – as has become clear during the corona-crisis – companies need to find a happy medium between customer care and dunning. Often, however, resources and know-how are lacking. Here are five reasons why you should outsource your credit management.

1. Concentration on the Core Business

Credit management is often referred to as risk- or receivables management. And receivables management has to be learned. If you want to take care of it yourself in your own company, time and effort are required. What will automatically suffer as a result is your actual core business.

If you outsource your accounting, you won’t have to worry about open bills, because others will be keeping an eye on that for you.

2. More Liquidity

One of the greatest advantages of credit management is that you automatically gain more financial freedom. Alongside a comprehensive protection against bad debt losses, there is also the option to prefinance receivables within a short time.

In this way, your company will no longer be dependent on your customer’s payment morale, so you can plan your finances reliably and as required.

3. Less Risk for your Company

The service provider that offers credit management to your company takes on the risk of the orders to be carried out and will bear the financial consequences if it violates the statutory requirements or fails to meet deadlines.

As a rule, the staff are trained appropriately and possess a wealth of experience. This reduces the risk and increases the security.

4. Lower staff costs

Do you employ someone who takes care of the receivables management for your company? Then you will be faced with staff costs, materials costs, as well as costs and time for the monitoring of the work. With outsourcing, all of the activities in connection with receivables are passed on to an external service provider.

5. You still maintain control

More purchases mean more bills and thus an automatic increase in possible due bills. With a rapid increase, it’s easy to lose track of things. A significant rise in e-commerce has been particularly noticeable during the pandemic.

Even if you or your staff no longer deal with the receivables management, it doesn’t imply that you no longer retain control over everything. This means that you continue to have a right to a say concerning, for example, the initiation of a debt-collection procedure.