Archie`s Business Connection

Posts Tagged ‘Benefits’

Article by Derrick King

Every business owner reaches a point where he or she considers the advantages of business finance and whether the business can benefit from one. A cash injection would certainly be useful in optimizing daily operations, getting needed equipment or for expansion, but when is the right time for a business to take advantage of financing? What most business owners don

Article by Mani Malarvannan

One of the most critical accounting activities for a business is accounts receivable (AR). Ironically for a small business that operates with limited capital, AR becomes very important to remain competitive. In today’s credit linked business environment, it is very relevant & efficiency can be much better harnessed and at a much lower cost. With the offshore service provider taking care of this aspect, the small business has more time and flexibility to attend to other core business areas like procuring orders, improving service delivery and mobilizing resources. Accounts receivable outsourcing is thus a trend among small business today.

Advantages of Accounts Receivable Outsourcing Recovering past due accounts without spending more in staffing and training is one of the greatest challenges for a small business. Most often, companies write off this receivable amount as loss because the cost to train and hire a qualified in-house staff to manage them outweighs the cost of collecting the debt. This predicament for small business is now set to come to an end. By outsourcing accounts receivable, small business can avail a less expensive – and often higher quality solution and achieve significantly higher collection efficiency, thereby improving liquidity and company bottom lines.

By accounts receivable outsourcing, companies gain access to top notch collection agency professionals and advanced collection agency resources even if they don’t have full time AR management needs. It doesn’t take a long roster of past due clients to make a big dent in a company’s bottom line. According to statistics, once an account becomes 90 days overdue, your business is likely to receive only 73 cents for every dollar owed. After 6 months, the amount drops to 50 cents on every dollar and down to 25 cents after one year. Bringing a collection agency on to handle accounts receivable addresses delinquent accounts within the first 90 days, before they get out of hand.

How Accounts Receivables Matter Sales that have not yet been collected as cash reflect Accounts Receivable. In today’s credit based business environment, small businesses sell their merchandise or services in exchange for a customer’s promise to pay at a certain time in the future. Timely collection of accounts receivables is an extremely important source of cash inflows. If this management is bad, small business may not have sufficient liquidity to meet its own expenses. Moreover, accounts receivable portfolios can amount to 21 percent to 34 percent of a small business company’s assets. Inefficient collection can amount to 25% of the asset base of a small business could put the very existence of the business at stake.

For a small business, like any other enterprise, accounts receivable also represent an investment. The money locked up in accounts receivable is not available for meeting the costs of running or expanding the business. The return from an investment in accounts receivable doesn’t occur until the customers clear their invoices.

Day-to-day management of accounts receivables is traditionally paper intensive, time consuming and expensive. Invoices, payments, purchase orders, and statements are often received via mail, fax, or email. It is always not feasible for small business operators to implement Enterprise Resource Planning (ERP) and Line of Business (LOB) applications for data management because of high investment cost. Even if they manage the cost, capturing information from hardcopy documents, routing them to concerned individuals, and providing easy access to the documents in a timely fashion is indeed a very complex task for small business involving deployment of skilled manpower and enabling systems. Ultimately, management and collection costs of accounts receivables far outweigh the collection putting the small businesses in financial jeopardy.

Efficient Accounts Receivable management is thus a key task for a small business enterprise.

AR Outsourcing – Small Business Advantage Small business operates with less manpower and do not have the ability to deploy highly expensive credit recovery mechanisms in their own country. Again, no-credit business is absolutely unthinkable in today’s perspective. Just by outsourcing small business accounts receivable to an offshore destination like India where there is an abundance of technically competent and skilled manpower at labor costs in the range of almost one-tenth of the rates in USA, small business can leverage best resources to attend a critical business domain that is very much relevant to its sustainability and viability.

Partnering with an accounts receivable outsourcing firm has many benefits. These benefits include, but are not limited to, increased cash flow; reduced operating costs; better small business accounts receivable control; efficient management of small business balance sheet accounts, increased sales to slow paying accounts; fewer delinquencies resulting in lower collection costs; and improved customer service. According to IDC review, outsourcing business processes from US is expected grow with a compound annual growth rate of 7.1 percent through 2009, when the market is expected to reach $ 355 billion. Of the total spending on account of outsourcing, small and medium businesses would have a share of 29% by 2009.

The progress of small business accounts receivable outsourcing can be fairly mapped on the company’s Daily Sales Outstanding (DSO) figures and reduction in bad debt. Number of outstanding invoices drops sharply, the impact being felt more in case of very old outstanding invoices as somebody in the offshore destination handling the accounts receivable portfolio is consistently following the invoices on a day-to-day basis. Due to increased fluidity and availability of time for concentrating on more core activities, small business witness significant growth and their overall turnover improve noticeably. On the whole, this better functioning and cash flow consistently improves their bottom lines. Offshore companies deploy cutting-edge technology to carry out their accounts receivable functions without any investment impact on the outsourcing company. This technology integration adds speed and efficiency and improves customer service for the outsourcing small business. Prompt and efficient follow-up reduces delinquency, thereby offshore companies work with many customers on accounts receivable processes and they are an excellent resource on best practices across companies that can be accessed by small business companies to improve their business efficiency and generate higher returns.

Accounts receivable outsourcing for small business is a trend that has come to stay. By leveraging dedicated and skilled manpower backed with high-end cross cutting technology, small business units can drastically turnaround locked cash to instant liquidity at a minimum process cost and utilize the resource to accelerate growth and higher returns.

More Business Outsourcing Articles

Article by Jeremy Winters

There are incredible prospects for business outsourcing in the current global economy. Globalism is for the most part the cause of such a business approach. Companies are now able to outsource their trade in a country on the opposite side of the planet. Although it sounds intriguing and promising, it is actually much better to think about the advantages and disadvantages of this type of an approach. Just like any other business strategy, risks are generally involved and hence it is wise to evaluate them. Because we live in a chaotic world, we long to have time for ourselves to enjoy the things we really like. Outsourcing areas of your business allots this huge undertaking to various people in their particular country and is typically accomplished in countries abroad. This greatly cuts down the pressure on a business. Farming out can in addition allow the company to grow at a quicker rate once projects have been delegated to others. This will mean that a specific company can bring more sales of its products than it would have otherwise. The organization works twice as quickly and in half the time once a lot more people are hired to carry out the business. This is very profitable to the business as well as for the workforce because more individuals are hired and can support their families. Companies in the much more developed nations can usually hire employees from a developing nation including India or Nepal at around $ 250 per week. This might seem to be very low, however keeping the currency exchange in mind, that is actually good pay. Constant follow-up must be maintained all the time to make sure that high quality is maintained by the offsite workers. It will be an enormous loss if standards are reduced at any time in the process. Also, locating very good quality workers is often hard for business outsourcing. No one should be willing to hand over a portion of their business to someone around the world without ensuring that they can be trusted. That is one of the most difficult challenges of outsourcing a business. When you are outsourcing, you have to keep in mind that the business is no longer entirely under your control. Although you will be the top manager, you have granted room for other individuals to take charge also. Continuous training and follow-up is critical because new employees are regularly added while the much more skilled ones depart. It is a cycle, particularly in this age Young people are regularly getting added to the business and trained, while older workers will at some point leave or retire. Having an overall idea of exactly what to expect and what you must consider before diving into business outsourcing helps you prepare for your future. Success will follow when you work out the fine balance of outsourced workers.

Article by Joseph Murray

Small businesses can benefit from business outsourcing. Rather focusing exclusively on the costsof outsourcing certain activities of your business, you should also consider the benefits such a changewould bring.

Cost Reduction Business outsourcing can help lower your business’s expenses. Let’s say you have clothing business. The equipment you’re using is not the best in the line, and it contributes to increasing your production costs. But what if you simply outsource your equipment needs instead? Would you be able to lower your production costs?

Labor costs can be reduced as well. Rather than hiring temporary or project-based employees, why not simply outsource your human resource needs to BPO vendors who know exactly what they’re doing? Working with an experienced firm will ensure that you don’t have to waste time going through dozens of applicants just to find a perfect fit.

No Waste of Time Business outsourcing let you take on projects right away and start on them immediately. Rather than spending time amassing your resources, you can simply approach a BPO vendor and they’ll provide you with all the resources you need for a fixed cost. The BPO vendor will take care of everything, from screening applicants to training them for their new job. All you need to do is simply give the BPO vendor an idea of what your needs are.

Improved Efficiency Consider how your business operates. Is marketing research and development orproduct distribution slowing you down? If none of them make up your company’s core competencies then nothing is stopping you from outsourcing them. By contracting such functions to a trusted third party, your company’s efficiency is improved two-fold: you have more time to focus on more important activities while contracted activities are performed at an even more efficient rate since they have greater resources and expertise than you do in those fields.

Act Big Small businesses are David and the big scary corporations are Goliath. But David managed to beat Goliath, didn’t he? And all he had was a sling. In the world of business, BPO vendors are the ones that could provide you with the exact kind of sling you need to defeat your competitors. With the help of business outsourcing, you’ll be able to level the playing field and maybe even face down the competition in time.

Lower Risk Almost everything in business comes with a certain degree of risk. Of course, the lower the risk, the better your position is. Business outsourcing can reduce the risk you’re taking in various ways. When you’re entering a new market, you can let a local BPO firm handle marketing research and development for you and you’ll be privy to insider’s knowledge.

Building Your Reputation You’ve graduated from a culinary school with flying honors and you bake thebest brownies in town. You want to go into business but you don’t know how to package and distribute your product effectively. Rather than force your customers to tolerate your bungling efforts, why not outsource your needs to a firm with the kind of expertise that will impress your customers?

By outsourcing your needs to experts, you’re able to quickly build a name for yourself and be known notjust for having the best brownies but ones that come in an excellent package, too!

These are not the only benefits of business outsourcing, but they’ll more than do for a start, don’t they?

For more information on this as well as other area’s of Internet marketing and How To Work From Home, please visit http://7dollarbooks.com

www.outsourcinglive.com In today’s video, I wanted to answer a question and talk about how to outsource an offline business. This was a question that was just asked via Facebook to me and I thought this would be a great topic to be able to talk about because not only online businesses are succeeding in outsourcing but offline business can actually adapt to these things. And I can give you many, many examples that people or large companies are doing it to medium sized companies are doing.

Article by Michelle Barkley

For any business, accounting is a sector that needs proper attention and maintainability. Only a well qualified and adept professional who has the deep knowledge of creating and handling accounts business outsource process can take your business to the targeted heights. The experts are responsible to manage several tasks like treasury back-office services, general ledger, tracking records, tax computation data entry and the list goes on. All these jobs require great concentration and alert professionals to follow the pace of constant changes and updates taking place in the market. According to a research, the field of accounting business outsource process is growing with the speed of 8 percent per year. This confirms the presence of countless outsourcing firms in the market giving you a broader set of options.

The in-house employee’s concept is highly expensive when compared to the outsourcing facilities. You might have to pay extra allowances other than the salary. However the most feasible method is to take help from outsourcing services to take care of your complete accounting process. Not only it will be more economical, but will also offer you quality work in due time period. As the industry is expanding its horizons, the urgency of accounting business outsource process has become indispensable. It does not matter, if your company is selling services or products, everybody needs a proficient accounting department. The accounting business outsource process is avid to share your workload that is related to accounts development.

Through the accurate utilization of accounting Accounting bussiness outsource process you can save your time and concentrate on other areas of your business. Economic gain is another spectacular reason to opt for outsourcing. The experts providing outsourcing services understand the meaning of accuracy blended with complete professionalism. Many surveys have proved that the accounting outsourcing business is flourishing at a great speed throughout the world. Companies are avidly seeking for this option as it promises to save a lot on their revenues. You do not have to take any sort of new financial investments in order to seek profits from the outsourcing companies. The entire process of associating with these service providers is naturally easy. Internet will give you the detail knowledge about all the providers with complete information on their previous accounts and clients. All you have to do is match your requirements and then decide on what to choose.

Every company has to maintain its accounting department that is efficient enough in handling every issue related to account. Today, the intense competition in the world of business and remarkable development with a great speed has made it totally compulsory to have the unique stratagem that can fulfill your goals. And match this, the companies are widely investing in accounting business outsource process that is a surely a sincere and faster way to accomplish work. You can even keep an account of quality and quantity of your work done by such service providers. Outsourcing work to firms offer you to save on your internal resources and decrease recruiting manpower and utilization of outsourcing resources you guarantee yourself a wider exploration.

Article by Lehman Hailey

The deepening penetration of the Internet across the world has led to explosive growth in online collaborations in recent years. The facility and convenience of online connections is driving the business outsourcing process. Entrepreneurs are constantly devising newer ways to outsource what they did by themselves so far. The motto seems to be: “what you can do yourself, there has to be someone else somewhere who can also do it still cheaper and better.” No business – big or small – has remained unaffected by this ultra new business trend.

There are some basic reasons why businesses are attracted by the idea of outsourcing. Some are primarily driven by the cost savings – hiring employees necessarily implies providing them with working space and facilities, in addition to their salary packages. Freedom from worries of employee liabilities is another important motive working behind business outsourcing process. Aggressive businesses and dynamic entrepreneurs see outsourcing as a mechanism that provides them opportunity to focus energies on their core business activities – thus giving them the competitive edge.

If you are a solo entrepreneur, contract marketing experts to promote your merchandise will save you effort and time. Virtual assistants can perform all your clerical work sitting in their homes, and your business website can be created and maintained by more knowledgeable people than you. Customer and technical support is another convenient activity that gets outsourced. Most of the human resource functions like recruiting and training are now increasingly being outsourced, particularly by large companies. Market research and analysis is another task that is ideal for outsourcing.

To derive maximum benefits of business outsourcing process consider: “what are those activities that you or your employees alone should perform?” For instance, you may not like to share certain information or data with outsiders. Further think about the core activities that you have so far reserved for the company employees: “can some or any of these be outsourced?”

In recent years, small service providers in particular, are waking up to the idea of business outsourcing process. Winning an outsourced project (or task) is a one-time activity – relationship is over when the task is completed. When a process is outsourced (for instance, a database management), an ongoing relationship approach is required. It demands the vendor to be more closely familiar with the client’s needs, and the client to provide ongoing feedback and necessary training to the vendor.

But there are certain issues inherent in the business outsourcing process that need careful attention: Off shore outsourcing has cultural and linguistic problems inherent in them. Loss of in-house business expertise is an important issue since you begin to rely on outside experts. There is always a fear of losing control on the manner of execution of the business process. The vendor may not be able to sustain the service for whatever reason – financial or management. The later two issues can be addressed only if the client sheds the role of a “hands-off” onlooker and takes an active role in supporting the vendor. Then the relationship acquires some colors of business partnership.

More Business Outsourcing Articles