According to the networking site AngelList, in Silicon Valley alone, there are more than 23,000 start-ups; that is truly an impressive number. There is, of course, speculation and studies that indicate that the US market is facing a start-up slump for numerous reasons. Slump or not, every year sees a large number of start-ups emerging and these businesses pick up at an alarming rate. Sales pick up, more employees, tax demands increase- all in all, life isn’t as easy as it was when the start-up was founded.
As the founder of a flourishing start-up, one day you realise that you have a cash flow crisis. You have numerous overdue accounts receivable payments and with how things are going at work, you don’t have the time to contact defaulting customers and pursue pending payments. What do you do? Here are your options.
- Build an In-house Receivable Management Team– An in- house receivable management services team has its benefits. The team will be specifically trained to handle your business’ issues and needs. Such a team will also have the benefit of building and maintaining a good rapport with regular clients and customers. However, aside from having to take on the burden of hiring the whole team, you will also have to train them and keep an eye on them to ensure they are on the right track. Another issue is that as your business grows you might have to increase the size of your receivable management services team. If that seems like too much of work, there is a second option.
- Outsource to Receivable Management Services Companies– While there is a lot of controversy surrounding the topic of outsourcing, it is, without doubt, the best option for companies that don’t have the time or resources to build specific non- core business teams. Once you sign the contract, managing accounts receivables is no longer your headache; the receivable management services company will take care of it all. Their expertise in the field will allow them to negotiate with difficult customers and collect timely payments effectively. You will also have access to a larger team should the need arise.
Accounts receivable management is a thorn in the side for most start-ups. The bigger your company becomes, the more of a problem it is. If not dealt with quickly, receivable management can take down your company, so take action now.