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Account receivables are the outstanding invoices that a company has for the goods or services provided. It is usually a short-term debt made by the customers. The customers pay these amounts in a few days. Most of the businesses in order to increase their sales provide goods to customers on credit. They make it with an agreement that the payment will come at a particular time in future. Often, a business offers credit to its regular or special customer. It is usually to have a good relationship with the customers. The customers would not have to pay in each transaction that occurs. Routine payments also help both parties to keep track of every transaction that is made. However, many companies face a problem with not using an Account receivable system.

Some common problems faced by the companies are:

1) Missing of an organized system to ensure all the receipts of payments made by the clients.

2) Absence of real-time debtors aging.

3) No creation of follow-ups with the clients for payments.

4) Dependency on the sales team for all the payment awareness.

5) Never-ending issues in reuniting with the clients.

Account receivable outsourcing is the only way to eliminate all these problems. An outsourcing company will create systematic processing of account receivable that helps you track all debts and recover them.

Scope of work

Outsourcing your account receivable offers you various scopes to track all the debts. You can have complete visibility on all the movement starting from dispatch of invoices to audit support. Some scopes that you get from AR outsourcing are:

Generation of invoices

1) You can prepare invoices for every manual activity.

2) You can also generate invoices from all the relevant software.

Dispatch of invoices

1) You can dispatch any invoice to the customer.

2) Easy sending of invoices by emailing one copy for faster payment.

3) You can update the dispatch information that is available on real-time.

Make payment follow-ups

1) Now make a payment follow up based on the agreed credit period.

2) Maintain the communication history with the customers in online software.

3) An escalation matrix that helps you resolve the payment issue with 1st level of contact.

4) Continuous update on cash flow projection.

Accounting of revenue receipts

1) Bill wise accounting of every invoice raised on the customers.

2) Allocation of receipts on specific invoices only.

3) Accurate calculation of all the credit notes issued to the clients.

4) Accurate provisioning for any doubtful debt according to company's policy.

Reports and reconciliation

1) Generation of debtors aging report at a pre-agreed frequency.

2) Initiating restoration of the account statements with the clients.

3) Bill wise report on every outstanding invoice that can be shared with sales team whenever required.

4) Trial balance report to review and analyze all the outstanding invoices.

5) Item sales history report that tracks items sales, returns, costs, and profit margins.

6) customer transaction reports that serve as an audit trail in the customer's account.

Audit report

1) Creating a year-end audit report for all the debtors aging schedule.

2) Clearing all the doubts of the auditors that include queries related to account receivable functions.


Outsourcing your account receivable provides you with a lot of benefits. It helps you maintain accuracy on every transaction made to the customer. Some benefits of account receivable outsourcing are:

1) Accuracy in predicting the cash flow leads that leads to better working capital.

2) Access to real-time status of all debtors.

3) Creation of follow up with the clients as per credit period; it also includes documentation of conversation for eliminating the communication gap. 

4) No more dependent on the sales team for payment realization.

5) Reduces administrative costs.

6) Streamlines the billing and payment process in a business.

7) helps you in refocusing in all your necessities.

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