If you’re reading this blog, chances are you’re thinking about outsourcing your credit control but you’re not quite sure it’s the right thing to do. Whilst some people make the decision quickly and get on with it, others, like you, have concerns that need addressing first.

Here are the most common ones we hear, and what good outsourced credit control should look like in each case.

“I don’t want to damage my client relationships”

This is the one we hear most often, and it’s completely understandable. You’ve worked hard to build relationships with your clients, and the last thing you want is someone wading in and upsetting them.

What most people find is the opposite of what they feared.

Good outsourced credit control starts with empathy. A specialist will take the time to understand your clients, the relationships, the history, and approach every conversation with that in mind.

Because they’re not emotionally invested the way you are, they can handle those conversations calmly and professionally. They’re not worried about upsetting someone they like, or anxious about what happens if the client walks. That distance is what allows them to be empathetic and collaborative, rather than apologetic or avoidant, which is often what happens when business owners chase themselves.

First contact should always be friendly and professional, on the assumption that they may simply have overlooked the invoice. Escalation is an option, never a default.

One of our clients told us she wanted the whole process to be gentle, and that her clients should feel nurtured and looked after. She wasn’t disappointed.

“We’ve built this on personal relationships. I don’t want our clients to feel like we’ve sent in the debt collectors”

It’s worth being clear about this, because the two things are completely different.

Debt collectors deal with broken relationships. Communication has already broken down, the situation has escalated significantly, and the relationship is effectively over.

Good outsourced credit control is at the complete opposite end of that. It’s about keeping relationships intact by making sure the money conversation happens professionally and consistently, before anything gets to that point.

Will your clients feel like you’ve called in the debt collectors? In the vast majority of cases, no. A well-handled first contact, friendly, professional, and empathetic, doesn’t feel threatening. It feels like a normal business communication, and most clients respond by paying the invoice.

On rare occasions, a client will complain that you’ve set the debt collectors on them. In our experience, it tends to be the ones who feel a little entitled to take their time, whether that’s because they feel they have a close personal relationship with you, or simply because they’re used to paying whenever they feel like it. It’s rarely a reflection of how the conversation was handled.

What makes a difference is how you communicate to your own clients beforehand that someone else is now handling your credit control, and how clearly your terms set out what they can expect if an invoice goes overdue. The groundwork you lay at the start of a client relationship has a direct bearing on how how your clients receive that conversation later.

An unpaid invoice can get in the way of a good working relationship. The longer it’s left unaddressed, the more uncomfortable things become for both sides. Dealing with it professionally often clears the air. Many business owners find things actually feel better once an outstanding invoice has been properly sorted, because the awkwardness that was getting in the way has gone.

“I’m not sure I can justify the cost”

It’s easy to look at the cost of outsourcing your credit control and see it purely as an expense. The more useful question is whether it represents good value.

Start by looking at what the current situation is actually costing you. Every hour spent chasing invoices is an hour not spent on the work that generates income. That time has a value, and it’s worth being honest about it.

There’s also the broader question of what the money sitting in your clients’ bank accounts instead of yours is actually stopping you from doing. It’s worth reading our blog on the opportunity cost of credit control if you haven’t already.

There’s another version of this we hear regularly: “I can do it myself, and that way I keep 100% of whatever comes in.” In theory, yes. In practice, if it’s not happening consistently, that’s 100% of nothing.

Think of it as an investment rather than a cost. A good provider should be able to give you a realistic picture of what you can expect in return. Across our clients, we typically see aged debt reduce by between 50% and 95% in the first six months. That’s a reasonable benchmark for what good looks like.

“We’re too small to outsource something like this”

The size of your business has very little to do with whether outsourcing your credit control makes sense.

We work with businesses of all sizes, including very small ones. Two partners running a business together, both delivering the work, neither finding the time to chase invoices consistently. That’s a business that can benefit from outsourced credit control, regardless of how small it feels.

The question isn’t how big your business is. It’s whether you have overdue invoices that you aren’t chasing as consistently as you should, and whether the value makes the investment worthwhile.

“I don’t have enough invoices to make it worthwhile”

Sometimes this is true, and it’s important to say so.

If you have a small number of low value invoices going overdue each month, the cost of outsourcing may outweigh the benefit. A good provider will tell you that upfront rather than take you on regardless.

For many businesses who think they fall into that category, though, the picture looks different when you add it up. The value of what’s outstanding is only part of it. The more important question is whether there’s a consistent, ongoing need for someone to follow up on invoices promptly, month after month.

No matter how well you manage things upfront, invoices will always need following up. People get busy, things get overlooked, and without consistent activity, things slip. The value of outsourcing isn’t just in getting on top of what’s currently overdue. It’s in making sure that once you’re on top of it, everything that follows gets chased promptly and consistently, so it never builds up again.

If you’re not sure whether the numbers work for your business, a good provider will have that conversation with you before you commit to anything.

“What will my clients think? Will they assume I’m not big enough?”

Some businesses have worked hard to appear larger than they are, particularly when pitching for bigger clients. The worry is that having a third party chasing invoices will undermine that image.

In reality, outsourcing specialist functions is what well-run businesses do. Your accountant, your IT support, your HR adviser are probably all outsourced already. Credit control is a skilled, specialist function, and using a specialist to handle it says something positive about how you run your business.

What your clients care about is whether you deliver a good service consistently. A professional, courteous communication about an overdue invoice is unlikely to change their view of you. If anything, it reinforces the impression you’ve worked to create.

“I’m not comfortable giving a third party access to my accounting software”

This comes up occasionally. To do the job properly, a provider needs visibility of your outstanding invoices, which typically means access to your accounting software.

Modern cloud accounting software is built with this in mind. You control the level of access you grant, and you can remove it at any time. Any reputable provider will be transparent about how they handle your data and your clients’ data in line with GDPR.

If it’s a concern, talk it through before it becomes a reason not to move forward.

So is outsourcing credit control the right thing to do?

It’s not right for everyone, and any provider worth working with will tell you that.

Ask yourself:

Is late payment affecting your cash flow?

Is credit control consistently slipping down your list?

Do you have invoices of reasonable value that you aren’t chasing as regularly as you should?

If the answer to those questions is yes, it’s worth a conversation.

Get in touch to find out whether outsourcing your credit control is the right thing to do for your business.