Every day, small businesses turn to outsourced A/R firms to handle their accounts receivables.

Thousands of small business owners have watched their businesses grow more rapidly than they ever imagined as a result.

Outsourcing accounts receivables allows a small business to focus on revenue generating activity without worrying about getting paid. It also gives them access to professional A/R teams they otherwise wouldn’t have the capability to hire.

Every decision is crucial in the beginning stages of a business. The right one will help the small business grow beyond their wildest expectations. The wrong one is costly.

It’s not easy to hand over your A/R responsibilities. Cash flow is the lifeblood of a business. By outsourcing, you’re trusting an A/R firm with that lifeblood.

A small business must carefully consider who they partner with when outsourcing their accounts receivables.

After years of experience working with small businesses, we have compiled a list of five things you must look for when outsourcing your A/R.

Experience

The first thing one should do when choosing an A/R firm is look at past experience.

You want to work with A/R firms who have “been there, done that” and with great success.

Examine the A/R firm’s website. Look for testimonials to see what other clients say. Contact the firm and request case studies.

If an A/R firm can’t prove that it has been successful for others, why would you trust them to be successful for you?

Industry Knowledge

Every industry is different. Handling accounts receivables for different industries is different too.

An A/R firm who has only handled collections and A/R for B2B companies should not be trusted by a hospital. You also should make sure the A/R firm you are partnering with is experienced in and knowledgeable about your industry.

The A/R firm you partner with should have a deep knowledge of your customer base. Without this, an A/R firm won’t be nearly as successful.

Even worse, the firm may damage a relationship with a customer – often beyond repair.

Before partnering with an A/R firm, probe their industry knowledge and request case studies.

Ensure they’ve had past success with companies and customers like yours and will utilize that for your own success.

Transparency

The risk is too high to blindly appoint an A/R firm.

The A/R firm you appoint must have a history of honesty, as well as be completely transparent with their process.

It is important that the agency you partner with uses ethical collection tactics. Aggressive collection tactics can land you in legal trouble, as well as damage a brand image.

You must partner with a collection agency that has a solid reputation among clients and complete transparency.

Knowledge of You and Your Business

Your A/R partner must understand you and your company.

This means a complete understanding of your business, it’s customers and it’s goals.

If an outsourced A/R firm isn’t interested in knowing these things, you can make the assumption that they are not interested in being a long-term partner who will help you reach your goals.

Kevin Gershenson of Superior Realty Group believes that the most important thing when working with a collection agency is “understanding our business and achieving goals we set together.”

Remember, your outsourced A/R firm isn’t just a service-provider. It should be a long-term partner.

Top Technology

The accounts receivables industry, like essentially all industries, has recently been turned on its head by disruptive technology.

Using top industry technology, the entire A/R process can become seamless. Data and analytics can also provide the knowledge to collect debts much more successfully.

This technology is expensive and that’s for good reason – it helps get much better results.

Without an outsourced A/R team, a small business would not have access to this technology.

When choosing your A/R partner, you must ensure you are receiving access to this technology.

Outsourced A/R teams are meant to make a small business’s life much easier and help them grow. Choosing the wrong one only complicates.

Miguel of Oxygen XL explains that “in our experience, you must build trust with the company in order to have them hand us the keys to their A/R. This includes full transparency of the process, understanding their business and maintaining fruitful partnerships and relationships with their clients.

By doing your due diligence on these five things, you can be ensured that you are putting your accounts receivables in the right hands.