What is outsourcing?
Generally outsourcing is the practice of using outside firms to handle work normally performed within a company.
Small companies routinely outsource their payroll processing, accounting, distribution and many other important functions – often because they have no other choice. Many large companies turn to outsourcing to cut costs and this is where we as Three Peaks Group in association with the Debt Legal team specialise in credit management solutions that work.
What are the benefits of outsourcing?
The general benefits of outsourcing are:
Control Capital Costs
Cost-cutting may not be the only reason to outsource, but it`s certainly a major factor. Outsourcing convert`s fixed costs into variable costs, releases capital for investment elsewhere in your business, and allows you to avoid large expenditures in the early stages of your business. Outsourcing can also make your firm more attractive to investors, since you`re able to pump more capital directly into revenue-producing activities.
Companies that do everything themselves have much higher research development, marketing and distribution expenses, all of which must be passed on to customers. An outside provider`s cost structure and economy of scale can give your business an important competitive advantage.
Reduce labour costs
Hiring and training staff for peripheral tasks can be very expensive, and temporary employees don’t always live up to your expectations. Outsourcing lets you focus your human resources where you need them most.
Start new projects quickly
A good outsourcing firm has the resources to start a project right away. Handling the same project in house might involve taking weeks or months to hire the right people, train them and provide the support they need and if the project requires major capital investments (such as building a series of distribution centres), the start-up process can be even more difficult.
Focus on your core business
Every business has limited resources and every manager has limited time and attention. Outsourcing can help your business to shift its focus from peripheral activities toward work that serves the customer and it can help managers set their priorities more clearly.
Level the playing field
Most small firms simply can`t afford to match the in-house support services that larger companies maintain. Outsourcing can help small firms act “big” by giving them access to the same economies of scale, efficiency and expertise that large companies enjoy.
Every business investment carries a certain amount of risk. Markets, competition, government regulations, financial conditions and technologies all change very quickly. Outsourcing providers assume and manage this risk for you and they generally are much better at deciding how to avoid risk in their areas of expertise.
How outsourcing works with Credit Management
You outsource various aspects of your credit management functions to us and we effectively become your very own credit control department.
The aspects we cover include some or all of the following:
The setting of Credit policies
We consult and based on your business needs, goals and philosophy create a credit policy to govern your overall credit management.
Credit documentation & securities
We draft standard terms and condition of trade and payment that comply with the latest laws and give you maximum benefit. If you are a commercial credit provider (you supply other businesses as opposed to private individuals), we also look at the use of securities such as surety`s and other instruments as well as the potential use of credit insurance.
Credit vetting of potential customers
We credit vet the potential customers in various methods including credit bureaux to assess their credit worthiness and reduce potential credit risk.
Credit control on non-paying customers (“soft collections”)
Professional credit controllers communicate with your debtors that have exceeded their terms of payment and ensure timeous payment of their debts.
Bad debt collections
Here we attend to both the pre-legal and legal debt collection (at our cost) of the debtors that remain unpaid if you have outsourced the credit control function to us.
Credit management reports
We have a number of different reports that we can provide you with details of the credit management and cash-flow status of your business.
Contact us for Credit Management Solutions