3 Significant Reasons Accountants And CPA’s Should Consider OutsourcingTheir Delinquent Accounts To Debt Collection Agencies

By: David Montana

CPA's and accounting organizations afford very central and valuable services to all size organizations. Small business owners, as well as major companies and corporations, depend on their knowledge and expertise. This is particularly true during tax season.

As federal, state and local governments require organizations to maintain accurate and timely financial reports and statements, most organizations depend on accountants to prepare these reports.

However, while they help improve their clients' financial bottom line, its not uncommon for many accountants to have cash flow problems of their own, as they deal with unpaid receivables and bad debt from some of their delinquent business customers. This is especially so during the very busy tax season. As such, by outsourcing to a third party collection agency, an accounting firm can quickly increase their cash flow.

As an accountant, you're keenly aware that uncollected money from services already provided decline in value the more time passes.

To acquire new business necessitates spending demonstrably more in marketing and advertising, than it does to collect your past due receivables.

Outsourcing these delinquent receivables to debt collection agencies is a smart and cost-conscious business decision. In addition to being in the recovery of delinquent accounts, debt collection agencies are better equipped with the professional staffing, resources, software and other equipment needed, and they can do this much cheaper than can be done in your business.

Improve Your Profit Margin Without Getting New Customers

As mentioned earlier, you recognize how expensive it is to acquire new customers. While advertising and marketing expenses are necessary for any organization wanting to attract new clientele, more often than not, getting new business can seem like the only way to cover and/or grow already narrow profit margins.

Businesses should not overlook the tremendous value lying dormant in their uncollected debt. Be aware also that compared to the value of your outstanding receivables, you would have to nearly double your new business volume merely to break even.

Turning delinquent receivables over to a debt collection agency is far less expensive, and yields predictable, positive results. Monies recouped here will produce greater net profit to your accounting firm. Capital spent on marketing/advertising, while ignoring your past due receivables, is not spending smart capital.

Providing A Great Value-Added Benefit To Your Clients

Businesses are always looking for ways to cut costs and save money. As their accountant, you can offer additional savings and help improve the cash flow to your customers’ business bottom line.

Teaching them the importance of turning over delinquent accounts quickly when internal collection efforts prove unsuccessful, you make them see the cost savings in lost opportunity dollars, the depreciation of unpaid debt over time, not to mention the savings from reduced internal staffing and resources.

You can also show your clients the increase in your own cash flow and operating efficiency.By showing companies how to advance their financial bottom line and save capital, you become a trusted advisor and consultant. This will increase your overall worth to your customers, and make you stand out in a very competitive market.

Article Directory: http://www.articletrunk.com

| More

David P. Montana has written widely and worked as a corporate advisor in collection agency services three decades. David provides supplementary beneficial information and resources on the subject of debt collection procedures for accountants.

Please Rate this Article


Not yet Rated

Click the XML Icon Above to Receive Industry Articles Articles Via RSS!

Powered by Article Dashboard