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Outsourcing of functions within a business can be cost effective and gives the business access to specialists knowledge in the functions outsourced. So why not outsource the sales ledger.
For the small to medium size business pursuing a rapid growth policy it makes sense to outsource certain functions within the business to relieve the pressure on the prime movers and managers by making use of experts in these specific fields. The prime movers time is an important commodity in successfully developing a growing business. He needs to free himself as much as possible from day-to-day routine functions in order to concentrate fully on the development of the business.
Therefore it makes sense to consider outsourcing the sales ledger. Often a prime mover develops his business by personally knowing his customers and he is able to keep tabs on their payment performance as a result. But as the business expands and the number of customers increases so it becomes more and more difficult to maintain this personal touch. In deed valuable management time can be taken up in credit control and sales ledger management. What are the options? Do you bring in a Credit Controller? This adds a payroll cost to the business. Or do you look for an alternative solution – outsourcing.
I would suggest that outsourcing the sales ledger and credit control functions could well be a very cost effective solution being only a fraction of the cost of employing additional staff. You will be making use of expertise in an area where your own in-house knowledge may be limited.
Therefore why not consider using a factoring company to provide you with expert and professional sales ledger and credit control management. This is an effective way of outsourcing these functions as factoring companies specifically specialise in these types of services. Your cash flow can be improved with the introduction of an efficient and effective collection policy agreed by you with the factoring company. They can also provide bad debt protection giving credit ratings on existing and potential customers. On top of this you could receive up to 85% of the value of your invoices inclusive of VAT within 24 hours of the issue of the invoice from the factor as part of your agreement with the factor.
This could be the cash flow injection your business needs in order to grow and having released valuable management time by outsourcing the sales ledger you with have the time to concentrate on the development of your business to achieve the growth and expand your profitability.
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