6 Practical Reasons to Outsource Invoicing
Sending out invoices to clients is an important part of any business – it’s where your cash flow comes from! But whether you’re a solo entrepreneur, an SME or a large size company, managing your invoices can be a daunting task. Besides, it takes up time and resources you could spend on other tasks to keep your business running if you could outsource invoicing.
Outgoing invoices or accounts receivable is about the amount of payment to be received after a business has sold goods or delivered services.
Good management of your outgoing invoices has several benefits, such as:
- Better cash flow
- Prevent bad debt
- Higher available liquidity
- Boosts professional image
It is relatively common to outsource a business’ bookkeeping and accounting. There are several benefits to outsource invoicing too, which we will handle in this article.
Why is it beneficial to outsource invoicing?
As mentioned above, it is important for your business to have good invoice processing or accounts receivable management. Here are 6 reasons why outsourcing invoicing is beneficial.
1. Low(er) operating costs
Outsourcing your invoice processing to a well-equipped team at a professional services provider can cut its operating costs significantly.
The operating costs of invoicing involve different kinds of expenses. There is the indirect expense of having staff to process invoices and hidden costs, such as the negative cash flow due to an invoice delay.
An inefficient or hard-to-scale-up workflow where valuable time and resources are misappropriated can add up quickly in indirect and hidden costs.
2. Shorter payment cycle times
When you outsource invoicing to a well-equipped team, the process will be faster and more efficient than doing it in-house. A shorter payment cycle time means you will receive your accounts receivable quicker. This will positively impact your cash flow, increase liquidity and prevent debts.
3. Prevent errors and delayed payments
Your primary focus is business growth, not the administrative hassles around it. However, business financial administration, including sending out invoices, is not easy and prone to errors, especially if it doesn’t receive full attention.
Errors in invoices can occur in different ways, such as putting down the wrong price or incorrectly outlining the services rendered. No matter the error, it can lead to invoice backlog and delayed payments.
An outsourcing partner is dedicated to the task and has the experience, which will significantly minimise the chance for errors.
4. No need to hire new staff
Doing your invoice processing in-house means you need to have employees working on it. However, some business owners are concerned with the increased overhead, searching and vetting new hires, or the staff turnover.
When your business is growing and you’re sending out an increasing number of invoices to clients, you may not want to spend time and resources on hiring new staff to do invoice management in-house.
It can be more cost-effective to outsource invoicing. When outsourcing, you don’t need to worry about adding people to your payroll and taking care of insurance, pensions, office space and equipment.
5. Access to increased resources
An outsourcing partner dedicated to invoice processing and other financial administration, often has better resources than an in-house team. For example, software packages, equipment, administrative support and workflow processes.
The employees at a professional services provider or outsourcing partner have years of experience, know best practices and are always up-to-date on the latest legislation and compliance.
In addition, it means that you don’t have to invest in the latest tech, training and software, while your finances are taken care of with high professionalism.
6. Increase customer satisfaction
Your business processes and workflows have an impact on customer satisfaction. How would you rate the efficiency of your current invoice processing workflow? Do you have a robust system, efficient operating procedures and a solid plan for follow-ups?
Outsourcing your invoices to a professional services provider increases business efficiency. They also have high service levels and make sure your customers are treated with respect.
How can HKWJ Tax Law assist you?
Outsourcing invoicing processing – and any outsourcing any other financial administration – frees up time and money that you can spend on all other aspects of growing and running your business.
HKWJ Tax Law is here to assist you with all of your financial administration, including invoice processing.
We work within your structure, including your payment methods, security standards and payment timelines. Should you not have a process in place for your accounts receivable, we will work with you to create a plan that stays true to your business’ vision and mission.
Outsourcing services to HKWJ Tax Law is simple and safe. Data security is highly important and all our services are carried out with the utmost confidentiality.
Ready to get started? Do not hesitate to get in touch with us via the form below!
The HKWJ Group is a one-stop holistic service provider and advisor to help your business grow. Within the Group, Triple Eight Ltd provides a wide range of professional and corporate services, such as company secretarial services and company incorporation. At HKWJ Tax Law, we assist with financial administration, such as payroll, bookkeeping and accounting, as well as tax and legal matters.