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Outsourcing services is the latest wave of ways businesses across the U.S. are aiming to save money. You need to collect on payment for products and services delivered, and you need a team that’s available to follow up around the clock. But just what are some of the other advantages of outsourcing collections to a third party?
28% of Americans have debt in collections, and you’ve likely seen similar patterns in your own business. Collections are an inevitable part of doing business, but having an outsourced collections team can help make getting your money pain-free.
In this blog, we’ll explore the top advantages associated with outsourcing such a business-critical service, and how outsourcing your collections can help your business overcome common problems in your workflow.
The Top 6 Reasons Why You Should Outsource Collections to a Third Party
The power of outsourcing is in its cost-efficiency, access to expertise, and improving how you do business. But, with collections outsourcing, you’re also improving cash flow—making this an investment that nearly pays for itself.
Paired with the fact that there are different kinds of debt, from personal loan debt to medical debt, you need to work with collections experts who know the intricacies of different forms of debt.
Here are some of the other advantages of outsourcing your collections processes.
1. Cost Efficiency
Compared with in-house debt collection, working with an outsourcing partner and hiring your own team from their vetted hiring pool is far more cost-effective. When you choose to outsource your business’s collections, you don’t need to worry about the cost of recruitment, hiring, and training. Your outsourcing partner has already done that work for you.
If you need to expand your collections team, outsourcing makes it even easier to do so. You can easily add or remove team members, depending on the status of accounts. An in-house team can be time-consuming, expensive, and inefficient. Your outsourcing partner is there to help you optimize your cash flow and payment recovery.
Build Your Collections Outsourcing Team for 40% Less
How? When you outsource with Remote Employee.
2. Expertise and Compliance
Your collections specialists possess specialized knowledge and experience in debt collection, including legal regulations, negotiation tactics, and industry best practices. This way, you can ensure your business follows compliance in debt recovery, such as the Fair Debt Collection Practices Act (FDCPA), which reduces the risk of legal complications or penalties.
When you outsource with an experienced company in the Philippines, like Remote Employee, you’re doing more than just saving—you’re tapping into team member experience. Most often, citizens work abroad and then return home, bringing collections expertise from areas like the U.S. and Canada.
3. Faster Recovery Rates
Recovering funds with an outsourcing partner is even faster. Your team members have the experience to pursue delinquent accounts, using proven techniques and strategies to locate and communicate with debtors. This alone helps you maintain healthy cash flow.
As an added bonus, expanding your outsourcing team to collect on delinquent accounts reduces delinquencies. A high delinquency rate can have a negative impact on your business’s financial performance.
4. Improving Customer Relationships
Surprisingly, one of the best reasons to outsource collections is to improve customer relationships. Your team members are skilled in approaching debtors with respect and professionalism, working to find amicable solutions that satisfy both parties.
By entrusting the collections process to an external agency, you can distance yourself from the negative aspects of debt recovery and concentrate on nurturing customer relationships and delivering quality products and services.
5. Round-the-Clock Availability
Business doesn’t stop when you’re not on the clock. With outsourced collections services, you’re working with a team available 24/7—or whenever you need them. Your English-fluent team members make connections with those who owe your business money, and maintain a professional relationship.
6. Reduce the Rate of DSO
When you outsource your collections, you’re also empowered to reduce your business’s days sales outstanding (DSO). In short, DSO is how long it takes for your business to collect payment from customers for services and products. You’re able to save on time spent collecting on outstanding payments, and reduce your DSO.
How Outsourced Collections Help You Overcome Workflow Problems
Let’s be honest: an in-house collections team isn’t generating your business new revenue. Tallying up the cost of hiring and training additional staff just makes debt collection even more expensive. But one of the major benefits of an outsourced collections team is in how you can cut 50 to 70% of labor costs, and work with guaranteed collections experts.
The Power of Outsourced Collections: An Example
For example, say one lender is dealing with an increase in delinquent loans. Said company opted to build their collections team with outsourced support. In just a matter of months, said lending company could see an improvement in the performance of loans and repayment.
What’s the Advantage of Outsourcing Collections to a Third Party? Working With Experts
At Remote Employee, we pride ourselves on providing world-class outsourcing collections solutions. Out of a pool of qualified candidates, we only recommend around 3% of our staff for a specific position. We’re that dedicated to making sure your staff are a perfect fit for your role and company culture.
Why outsource with Remote Employee?
Our team is:
- Built with collection experts
- Fluent in English, with neutral accents
- Cost-efficient—you save up to 50 to 70% on labor costs
- Ready to work—we’ve already taken care of the bureaucratic red tape
Ready to build your outsourced collections team? Book a consultation today.