Are late payments plaguing your recruitment agency? 78% of businesses in the UK struggle with delayed invoices, with an average of £26,000 outstanding at any given time. Sound familiar? Outsourcing your credit control could be the solution to improve your cash flow and free up time to focus on your clients.
This blog will take a closer look at what credit control services entail and the specific benefits they offer to recruitment firms. Outsourcing your credit control to experts ultimately streamlines financial processes, enhances client satisfaction, and supports sustainable business growth.
In today’s competitive recruitment landscape, effective financial management is vital for long-term success. Often overlooked, credit control is a critical component in maintaining healthy cash flow and reducing debt. While some recruitment firms opt to manage credit control internally, we’re seeing an increasing trend of outsourcing.
Here at New Millennia, our recruitment back office solutions leverage advanced softwares and over 20 years of experience to save you time and money. We understand the importance of efficient credit control processes to the success of a recruitment agency.
What Is Credit Control Outsourcing?
Credit control outsourcing refers to hiring external specialists to manage a company’s credit control processes, such as monitoring payments and chasing overdue invoices. This frees up internal resources and ensures that credit control tasks are handled efficiently by experts, helping to maintain a healthy cash flow.
Credit control is a vital part of businesses, recruitment agencies in particular. If debts are not paid on time, this can cause huge cash flow problems for businesses; the firm may not be able to pay its employees or meet other business costs. Effective credit control processes ensure that your business will have plenty of cash to fund growth opportunities and pay for expenses.
The activities that come under credit control services can include:
- Credit checks
- Invoicing
- Payment reminders
- Debt collection
Which Businesses Can Outsource Their Credit Control?
Almost any business may choose to outsource their credit control to benefit from dedicated expertise.
- Recruitment companies in particular often choose to outsource their credit control because it allows them to focus on their core business activities, such as sourcing candidates and filling job roles, while leaving the management of invoicing and debt collection to experts. Recruiters’ time is valuable and without the burden of chasing up payments and completing admin, it can be put to good use. Additionally, recruitment firms experience fluctuating workloads, and outsourcing allows them to scale credit control efforts efficiently without hiring additional staff or incurring fixed costs.
- Companies with large ledgers: Managing the sales ledger consistently can pose challenges for large businesses – demanding substantial credit control resources, even with an established team in place. Plus, managing, motivating, and supporting a sizable in-house credit control team requires considerable resources, both in terms of finances and time.
- Smaller companies and new businesses: Due to the limited staff and busy schedules common in small businesses, credit control often takes a back seat, handled sporadically whenever time permits. Outsourcing this function not only frees up time for other essential tasks and business growth but also ensures it receives the attention needed to minimise late payments and enhance performance.
- Fast-growing businesses and firms hoping to grow: Rapid growth can be exhilarating but it also stretches departments thin, especially when managing credit terms. If your burgeoning invoice stack outpaces your internal resources, both credit control performance and cash flow can suffer. Outsourcing to specialist credit control agencies offers a flexible solution: scale expertise up or down based on your company’s trajectory. This avoids the fixed costs of in-house credit control while ensuring healthy cash flow.
The Benefits of Outsourcing Credit Control
Credit control is critical for the success of any businesses – it reduces the wait for payments and improves your business’ cash flow. Recruitment agencies can greatly benefit from outsourcing credit control; by entrusting external experts, you are able to completely focus on your core operations without compromising your financial stability. Let’s get into the five crucial areas where you could see improvement.
1. Free up time and resources
Outsourcing allows you to reclaim your time and resources, letting you focus on what truly matters: building your business and connecting top talent with ideal opportunities. Your internal team are freed from the hassle of chasing payments and you have the support you need without needing to hire and train an in-house credit control team.
2. Improve cash flow
For recruitment firms, timely payments and a healthy cash flow is crucial. Outsourcing credit control accelerates invoice collections as a team of experienced specialists work diligently to minimise overdue payments. Additionally, you’ll gain access to accurate data and reporting, helping you to make informed financial decisions and confidently plan for the future.
3. Enhance client relationships
Robust client relationships are absolutely essential to success in the recruitment industry. Outsourcing credit control will improve these relationships by ensuring professional and tactful communication throughout the payment process. Dedicated specialists navigate client interactions carefully, even during delicate discussions about invoices. This approach minimises disputes and misunderstandings, paving the way for stronger partnerships with your clients and contributing to the sustained growth of your business.
4. Save money
In the competitive recruitment market, every penny counts. Outsourcing your credit control saves you money through eliminating the fixed costs of hiring an in-house team. You’ll also see savings in the long-term because outsourcing helps to reduce the occurrence of late payments. Ultimately, outsourcing leads to a significant return on investment and financial stability.
5. Access expertise and technology
Outsourcing credit control allows you to tap into specialised knowledge and innovative technology. A dedicated credit control partner will use advanced software to ensure accuracy in every step of the process. Additionally, their industry-specific expertise keeps you informed of the latest regulations and best practices, mitigating financial risks and safeguarding your business. Your outsourcing partner becomes an extension of your team, consistently optimising their processes to deliver the best possible results for your firm.
How New Millennia’s Credit Control Services Can Help You
If your clients are regularly paying late and chasing invoices is consuming a great deal of your team’s time, our credit control services may be your solution.
Our specialised team will leverage their expertise in the recruitment industry to ensure timely payments and maintain positive customer relationships. Whether you’re a scaling startup or an established SME, we’ll tailor a back office plan that addresses your specific pain points.
Get in touch today to take the first step towards improving the efficiency and financial performance of your recruitment agency.
