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How to Optimize Your Most Valuable Asset—Your People

Outsourcing key financial operations provides your entire organization with tools necessary for smart, sustainable growth.

As your business grows, outsourcing some key financial operations is a cost-effective way to manage that growth. You can optimize your most important asset—your staff—by giving your entire organization the tools necessary for smart, sustainable growth.

You’ve worked hard on new product development and go-to-market strategy, and you have a growing business on your hands—excellent work! Retailers seem receptive to your product and orders are increasing slowly but steadily. Does that sales growth mean you need to change the staffing dynamic that you’ve also worked hard to build to meet your needs?

Your first instinct may be to hire more administrative staff to handle the additional billing and collections, along with credit managers to check potential new retailers who are inquiring about your products.

Smart managers know that taking on new hires may cause a drag on earnings if sales slow. There’s also a time drag, as new staff requires training and more management oversight, especially in the short term, as they overcome the learning curve. And, if sales slow, these resources sit idle, eating away at your profits. Smart management will look to not just protect your bottom line going forward, but also protect and nurture the people and the culture.

How Outsourcing Accounts Receivable (AR) Management Can Protect Your Fine-Tuned Staffing Dynamic

You’re probably already familiar with the benefits of outsourcing. For instance, you may use 3PL instead of building or renting your own warehouse. You probably contract with one or more distributors instead of creating your own fulfillment operation. If your staff has already grown, you probably use a payroll service. You may also outsource tax preparation, PR, advertising, IT support, legal—all functions you’ve found more cost-efficient to outsource instead of adding full-time employees to handle them.

The five top reasons companies typically outsource certain functions within their business are as follows: 

1. Offload tasks that take away too much of their staff’s time from focusing on the most important work.

2. Satisfy the need for expertise that cannot be replicated internally.

3. Lack of ability to scale up swiftly enough in high growth phases or effectively manage staffing for seasonal businesses.

4. Avoid adding management layers that are needed to effectively manage these diverse functions.

5. Minimize possible fixed cost increases.

Outsourcing AR management brings the same benefits as outsourcing other services—it’s more cost efficient and the work can be done by professionals who are well-trained and dedicated to the work. Outsourcing those aspects of operations frees up the energies and time of your existing staff so they can focus on what they are really hired to do.

A Superior Staffing Plan

The benefits of outsourcing AR management extend beyond just savings. CIT Commercial Services (CIT) AR management solutions provide access to CIT’s extensive retailer credit intelligence. An in-house credit manager might be able to keep up with 50 accounts, and that person would probably need to start a new underwriting for each new customer. CIT, on the other hand, tracks and analyzes daily transactional data from thousands of retailers—up-to-the-minute intelligence you can access via a web-based portal or a smartphone app. If CIT’s online data doesn’t yield the intelligence you need to make a final decision about to whom to sell, you will have access to a dedicated CIT Client Services Officer (CSO) to discuss potential transactions with respect to which CIT may assume the credit risk of your customer.

In addition, CIT has assembled a knowledgeable and experienced AR management and collections team that has the infrastructure in place to process account receivables regardless the amount and size. Because of CIT’s size and clout with retailers, we will be more likely to collect what you’re owed from even the most recalcitrant retailer, and in a timelier fashion, than an in-house collections manager.

But, the savings are important too. The money you can earn, and save, by outsourcing AR management, is money you can reinvest to develop new products, expand your customer base, and nurture your existing staff.

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For more information on consumer electronics industry operational finance best practices visit the CE Financial Strategies Center

Niraj Lal is a business development officer atCIT Commercial Servicesspecializing in factoring and asset-based lending solutions for consumer product companies including consumer electronics, housewares, and apparel.