Billing and invoices may be a small part of your overall business process – however, the time (and expense) to finish these things stack up fast! That’s why property managers outsource bills and invoices to free up time and save money.
Before we get into why you need to outsource these operations, let’s take a look at a brief description of what bills and invoices are. If you’re trying to collect money from your customers, you’ll use an invoice. Meanwhile, if you’re trying to pay your suppliers, you’ll most likely use a bill. Both documents convey the same information about how much money you owe for the sale of goods or services.
What is an invoice:
- Payment for services rendered is requested through the use of an invoice.
- Before payment is received, an invoice is sent out as a request for payment by a specific date.
- An invoice serves as a record of the goods or services that have been sold to the business for accounting purposes.
What is a bill?
- It is necessary to send a bill before receiving payment.
- A bill serves as a reminder to the customer to make any pending payments thereon. These serve as a reminder of the goods and services of a business.
- An invoice you receive as a customer from a supplier is recorded in your books as an obligation to pay.
Benefits of Outsourcing Billing & Invoicing
A wide range of businesses uses external billing services. The fact is, not only would you require help in terms of resources, but also in terms of compliance.
Your company runs the risk of stagnation if you rely solely on in-house teams. Plus, you can confidently take on your competitors if you have multiple billing services in place.
With that said, here is how your business can benefit from outsourcing billing and invoicing:
Decrease Workload of In-House Staff
Accounts payable departments are often overworked. This is common during periods of rapid business growth when invoice volume increases. As a result, this boosts sales but strains your AP staff. This is especially true for paper-based processes, data entry, approvals, and PO-heavy processes. Every additional invoice slows AP productivity.
Duplicate payments cost businesses a lot of money. In one report, 0.1% to 0.5% of paid invoices are duplicates. Without controls, duplicate payments can cost businesses hundreds, thousands, or even millions of dollars.
Missed or late payments cost your staff time to recover erroneous spending, reducing time for other AP functions.
Reduce Operational Costs of Invoice Processing
Manual invoice processing can cost $30. Inefficient workflow, uncooperative vendors, or back-and-forth communications between departments to verify invoices can add up quickly.
But outsourcing can reduce operational costs by up to 70%. Furthermore, you don’t have to worry about overhead from hiring new staff to keep up with your business’s growing demand.
Access To New Resources
When you partner with an outsourcing service provider such as Global Strategic, your business can equip itself with systems and technology that help you handle discrepancies, manage vendors, and gain administrative support as needed.
Since you’ll pay this vendor to manage your AP, they’ll provide reporting and other administrative services. Managed AP services can provide reporting on invoice cost and payment time, as well as analysis, month- and year-end close, reconciliation, and document management.
Streamline Billing and Invoicing Process
Naturally, outsourcing invoice processing simplifies invoice approval. Additionally, hiring property management virtual assistants (PMVA) provides accurate, complete invoices. This eliminates missing data and invoice errors.
Now, error-filled invoices are rare. Thus, the finance team members won’t have to correct invoice processing errors.
Types Of Bills and Invoices You Can Outsource
There are a wide variety of invoices that companies can make for their customers. That said, the type of invoice that you select will be determined by your industry, the manner in which you charge customers for your services, and the frequency with which you anticipate being paid.
Here are the types of invoices you can outsource:
A company will typically issue a standard invoice, which will then be delivered to the customer. This is the most common type of invoice that is produced by small businesses, and the format is versatile enough to accommodate the majority of business types as well as billing procedures. The following information pertaining to the transaction is typically included on standard invoices:
- The name of the company as well as its contact information
- Name and other identifying information about the customer
- An invoice number
- The amount of money that is owed to the company by the customer in exchange for the company’s services.
A business that needs to offer a discount or a refund to a customer, or that needs to correct an error that was made on a previous invoice, will issue what is known as a credit invoice.
This type of invoice is also known as a credit memo. When you receive a credit, your invoice will always have a sum that is negative.
A company that sells its wares to customers located in other countries must create a commercial invoice for each transaction. When goods are sold across international borders, the customs duties associated with the transaction must be determined using the information contained on the commercial invoice.
The following items of information are typically included on a commercial invoice:
- Shipment quantity
- Weight / Volume
- A detailed account of the merchandise
- The total price
- The format of the packaging
After the completion of a project, the client is presented with a final invoice that contains a request for payment. The final invoice is typically much more detailed than either the pro forma or interim invoices, and it includes the following items as a matter of course:
- A detailed inventory of all the services that were rendered.
- Cost of the project in its entirety Invoice number Due date for the invoice
- Methods of payment that are acceptable
Past Due Invoice
A company will send an overdue invoice to a customer if the customer has not yet provided payment by the date that was specified on the final invoice. As soon as a client misses a payment deadline, you should immediately send them an invoice for the amount that is past due.
Invoices that are past due include all of the service and payment information that is listed on the final invoice, as well as any late fees or interest charges that may have been incurred.
A timesheet is a type of invoice that is used whenever a company or an employee is billing a client based on the number of hours worked and the rate of pay that is typically used. Contract employees who are paid on an hourly basis by their employer are required to keep timesheets.
An expense report is a form of an invoice that an employee is required to submit to their employer in order to be reimbursed for costs that are directly related to their work.
For instance, if you send an employee to a lunch meeting with a client, that employee has the ability to create an expense report in order to bill your company for the cost of the lunch, parking, and gas that they paid for themselves in advance.
What Industries Can Outsource Bills and Invoices?
As mentioned earlier, all industries use billing and invoicing. As such, you can find this outsourced in industries such as Property Management, Accounting, and more!
When you outsource your billing needs to a team that is well-equipped, the process will be both quicker and more efficient than when it is done in-house.
This is because the team will have access to all of the necessary tools. If the amount of time it takes for payments to cycle is reduced, you can anticipate receiving the money owed to you from your customers more quickly.
This will have a positive impact on your cash flow while also increasing your liquidity and preventing debts from accruing at the same time.
Should My Business Outsource Bills and Invoices?
Invoice and billing can be outsourced for a variety of reasons. However, as a rule of thumb, the number of employees in an organization is the most important factor. Additionally, another factor is based on the size of the company’s sales, its assets, and profitability.
The processing of invoices is one of the most important aspects of running a small business. Any small business that relies on fast cash flow is doomed if they don’t do this properly. The higher the inward and outward remittances, the greater the Return on Investment will be with limited capital.
A small business owner has to deal with a wide range of operational factors that directly impact business growth, but they don’t have time to follow up on invoice receipt and payment. Invoice processing outsourcing is the best option for small businesses because of this.
If you’re ready to start your outsourcing journey, Global Strategic can help with your business needs and give you the Strategic Advantage needed to edge out the competition. Talk to us today and learn more about how offshore outsourcing to the Philippines can help your business and future business growth.