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Outsourcing Credit Management and Accounting

5 reasons why that speak in its favour, 15 May 2019: When e-commerce businesses grow, a certain complexity in accounting inevitably arises. Five of the biggest challenges here can be solved through the outsourcing of credit management and accounting.

Online shopping is growing and with it the complexity of the credit management. All payment transactions have to be monitored – from the purchase in the web-based shop to the receipt of payment in the company account. On top of this there is the administration of vouchers and goods receipts, the checking of cancellations and credit notes, the support of subscription models and the preparation and sending of dunning letters. In order to accommodate the customer as much as possible in the purchase process, many retailers also offer multiple payment options and co-operte on this with various payment service providers (PSPs). The administration costs for online retailers are rising tremendously, and as a result, working with tax advisors is not getting any easier.

Those who prefer to do everything themselves soon reach their limits. This is where business process outsourcing comes into play – external service providers take over parts of the business process and free up the company so that it can better concentrate on its core business. As a specialist in high-volume billing, nexnet GmbH, for instance, supports its customers principally in the areas of credit management for e-commerce and monitoring of the payment service providers, so-called payment clearing – regardless of the business sector, and at the level of individual transactions. For the retailer, this results in five major advantages compared to self-management:

5 Challenges

One Solution

1. Managing multiple payment service provider simultaneously
With every payment partner that pays out money and provides settlement data tothe operator of the online shop, the complexity of the financial management rises. If you work with several PSPs, it becomes increasingly difficult to tell accurately whether individual payments have already been made and transferred to the retailer by the payment service provider. Instead of collating the data with expensive self-built solutions, it is more cost-effective to outsource the processes. With the automatic allocation of payments per shopping basket, the retailer knows immediately whether the money is still with the company, with the PSP or is already in its bank account. Transaction fees are recorded without input taxes and collated with the amounts paid out. What is significant here for the retailer is that payments and orders of the customer and PSP are not consolidated, but are entered at the individual transaction level, as consolidations lead to problems for the accounts department and the tax adviser.

2. You never lose sight of payments
If a retailer fails to keep track of its open receivables or does not react in time, this can become a major problem for young or small companies in particular. The company’s own liquidity is put at risk. Through the monitoring of the payment behaviour of the customers and the payment service providers, however the correctness of all of the figures for all individual and mass transactions can be secured, so that the company can remain solvent.

For credit management, nexnet offers individual solutions that can be tailored to the requirements of the company. In addition to the commercial dunning procedure, nexnet takes over the preparation and sending of dunning letters, the management of reminder fees, and the monitoring of payment behaviour. In the further course of the dunning procedure, an automated forwarding of claims to a preferred collection partner is also possible.

3. Accurate monthly closing statements with limited costs
Communication with one’s tax advisor is probably an area that could be simplified for most companies. PSP transactions in particular can lead to problems in this regard. Outsourcing can also deal with a major challenge here. Through the recording in accounts of all business transactions, the company thus receives a certifiable monthly closing statement in a very convenient way.

4. No problems with international transactions 
Internationalization together with diverse currencies and tax rates can lead to major headaches for the accounting department. For companies with an international focus, nexnet processes and records all movements of money in all currencies with exchange rates that are accurate to the day. In doing so, it of course records sales and VAT using international tax rates. For companies based abroad, nexnet can prepare the accounting according to local GAAP.

5. Maximum security – with a constantly changing legal situation
Observing the statutory regulations and changes is very costly, especially as changes often arise here that affect credit management and accounting. This often necessitates an analysis and evaluation by expensive specialists such as lawyers and auditors. With outsourcing, part of the responsibility can be handed over to the service provider.

Payment Clearing Cloud for Small and Medium-sized Companies

It’s not only global players that have to comply with international standards in their accounting. Start-ups and smaller companies also have to comply with all guidelines. But it’s often financially impossible for them to consult external specialists. nexnet GmbH’s Payment Clearing Cloud can be the solution here. For with cloud computing, there are hardly any entry- and operating costs. In addition, young entrepreneurs can place their focus completely on growth, while the complex accounting processes are handled automatically in the background.

Due to the cloud-based approach, the Payment Clearing Cloud offers the advantage of more transparent as well as lower entry- and operating costs. Companies can concentrate on their business, while complex accounting process are automatically handled in the background. Starting from 99 euros per month, online retailers can monitor their payment service providers and have a testable monthly closing statement compiled.

Are you losing sleep over the many bills that you generate with your digital business model? You’ll be well advised to opt for business process outsourcing.