What are accounts receivable services?

Receivables are defined as the money owed by a costumer after they purchase goods or services from a company and still having credit due. These accounts receivable explained above are often shown as asset on the company’s balance sheet.

, Accounts Receivable Services deal with collection of due amounts from the customer.

Brief understanding of accounts receivables

Lets us say, a customer owes certain amount due to a company. He receives an invoice, which needs to be paid within a certain time period which is known as payment terms. The money has to be repaid within 30, 45 or 60 days depending on the customer.

On every company’s balance sheet, the amount receivable will be the amount the customer owes to the particular company. In the balance sheet, the receivables will be added in debit column and the revenue on the credit column. After the customer pays back the money, the cash will be debited and the receivables will be credited.

Accounts receivable software used

These are the software which is used for accounts receivable services namely:

Quickbooks – Accounting software for small business financial management. 
Check marks – Payroll & Accounting software for businesses.
M.Y.O.B – Deals with entry level accounting to multi-user enterprise software.

Outsourcing Accounts receivable services in India

In the current business scenario maintaining a strong cash flow is the essence of growth and success. A fine tuned account receivable function is vital for your organization’s cash flow. But this requires investment of time, talent and resources in order to be effective. Hence outsourcing these services has become a valuable alternative.

The following are the accounts services that can be outsourced to India

Transfers & Adjustments
Finance & Accounting Services
Accounts Payable Services
Clearing and settlements Services
Liability Processing Services
Accounts Reconciliation Services
Entering Receivables Transactions Services
Bills Reconciliation Services

Benefits of outsourcing Accounts Receivable Services to India

Reduced expenses on staffing, training and infrastructure costs as you can take the services of another party. This will also reduce valuable time and you’re your organization to concentrate on your core business objectives.
Accelerated financial settlement cycle which will increase cash flow and also minimizes bad debt.
Improved productivity.
Enhanced customer satisfaction and loyalty.

The benefits listed above really prove that outsourcing “accounts receivable services” to India can give your organization a competitive edge.

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Direct Benefits of Auto Recurring Billing for Businesses include:

* Faster payment processing (you get your money faster)
* Elimination of printing, mailing and postage costs
* Elimination of defaults and associated collections activities
* Streamlined data entry and bookkeeping
* Elimination of time consuming trips to the bank
* Normalized cash flow
* 24 hour NSF notification
* Improved customer service
* Ability to accept payments funded from credit/debit cards, checking account and savings accounts.

Auto recurring billing systems can be used for both static recurring charges (the same amount each time) or for variable bills. In either case, the recurring billing system saves time and money by obtaining advance authorization from customers to charge their accounts on a regular frequency and by entering customer information into a database system only once. That data is then accessed whenever payments are processed, and the customer record is updated to reflect each payment collected. The two examples below provide the steps involved in auto recurring billing systems that process static and variable recurring charges.

Auto Recurring Billing: Static Amount

1. Customer data is entered once (including amount, frequency, duration, type of transaction and account information)

2. Payment Processing System charges/debits account on schedule and counts down payments left (system can also be set for indefinite duration)

3. Payment processing system automatically generates an email receipt for the customer and copies the vendor.

4. Payment Processing System automatically identifies all failed transactions and reconciles with main database.

Auto Recurring Billing: Variable Amount

1. Customer data resides in external database that calculates payment due

2. Data, including amount due and account information is exported to .csv file.

3. .csv file is uploaded to payment processing system as a batch

4. Payment processing system processes all transactions in batch

5. Report is generated for all successful and unsuccessful transactions

6. Report is exported and then uploaded back into original database, reconciling all open balances with processed payments

Why Your Customers Want Auto Recurring Billing

Auto recurring billing is not only a time and money saver for businesses, but for consumers as well. In fact, many consumers are demanding it from the companies with which they do business-and if you don’t offer it, your customers may select a competitor who does.

NACHA.org, the organization that oversees all electronic payments, reports that 54% of all US households currently use ACH (a direct-debit from a checking or savings account) for at least one monthly bill. Auto recurring billing takes ACH to the next level-eliminating the need for the customer to actively pay a bill (whether by paper check or online).

Direct Benefits of Auto Recurring Billing for Customers include:

* Bills are automatically paid on-time, every-time, even if customers are ill or out of town.
* Late payment fees are eliminated
* Time and expense of writing and mailing checks is eliminated
* Customers can keep electronic records of all invoices and receipts
* Electronic payments are more secure than paper checks

How to Implement an Auto Recurring Billing Program

Implementing an auto recurring billing program is simple. If you currently accept payments electronically via direct-debit from a checking or savings account, or via credit card, you can likely use your current payment processing system to implement auto recurring billing. The auto recurring program can be implemented in two ways.

1. Use the auto recurring billing functionality in your business management software (such as QuickBooks), and export a batch (daily, weekly, monthly) for processing in your payment processing system. This is best for variable payments.

2. Implement the auto recurring billing function in your payment processing program (note that some companies require an additional charge for this function.) This is best for static payments.

If you don’t already accept electronic payments, you will need to subscribe to this type of service. The simplest way to do this to find a service such as PaySimple that will enable you to perform ACH transactions using your current business bank account. This system will enable you to set-up an auto recurring billing program for your customers where you can direct-debit their checking accounts for outstanding balances. (An additional benefit to this type of system is that you can electronically process any paper checks you still receive from customers who do not elect to participate in the auto recurring billing program.)

Marketing an Auto Recurring Billing Program to Your Customers

Once you have processing capability in place, you can open the auto recurring billing program to your entire customer base. Many consumers know about these programs and are excited to sign-up for the new offering. Others need to be educated about the electronic payment process, and the benefits it can provide them.

Note that you cannot enroll a customer in an auto recurring billing program without explicit permission. Each customer must provide you with bank account information and sign a form giving you permission to debit that account.

Electronicpayments.org provides a wealth of information about electronic payment processing, and also provides materials you can use to educate your customers. PaySimple also provides a welcome kit to all customers that contains a complete auto recurring billing marketing plan with associated materials.

Most organizations introduce auto-recurring billing programs by sending a letter to the customer base, and asking them to sign-up for the program. A sample customer letter is available from: http://www.paysimple.com/sample_auto_recurring_billing_letter.pdf

When customers have signed up, you stop mailing them paper invoices, they stop mailing you paper checks and all billing and collections are handled electronically.

India has the third largest economy and the second fastest growing economy in Asia. It has a vast pool of professional talent and an enormous reservoir of intellectual capital with a growing middle class.

India’s dense population creates economic opportunities and pressing internal social problems such as overcrowding, environmental degradation, poverty and social unrest. The economy and society are in a state of rapid transition. There are pressing environmental issues because of overpopulation such as air pollution from industrial effluents and vehicle emissions, water pollution from poor sanitary conditions and soil erosion.

According to the World Bank, about 380 million people in India live in poverty on less than $1 a day; this is about one-third of the population. Nevertheless, middle and upper class Indians have created immense wealth in an economy bursting with opportunities. India’s business climate is changing rapidly.

This social paradox is in some ways similar to the controversy in the U.S. over big box stores and their effect on smaller retailers. The same issue is debated in India regarding Western style supermarkets versus mom and pop stores. India has a child labor problem; the U.S. has a problem with illegal immigrants who tend to take the lowest paid jobs in the U.S., performing jobs that most legal Americans do not want to do. We live in a world of conflict, change and opportunities.

There are 14 official languages in India. Hindi is the national language. English is a secondary language used for national, political and commercial communication. India is the largest English speaking nation in the world. India’s legal system is based on English common law.

India’s economy is growing over 10% per year with a labor force of more than 500 million people. The Indian retail sector is growing at a rate of 47% per year. Manufacturing is expanding. There are large numbers of well educated people skilled in the English language. Today India is a major exporter of software services and software workers. Other major industries include textiles, chemicals, food processing, steel, transportation equipment, cement, mining and machinery.

In 2006 India exported over $123 billion dollars of textile goods, gems and jewelry, engineering goods, chemicals, leather items; only 17% were exported to U.S. partners. Imports the same year were $184 billion dollars; less than 6% of this import business originated with U.S. partners.

What does this all have to do with accounts receivable financing? The expertise of a commercial finance company can be invaluable with regard to helping you succeed in India’s enormous marketplace. If you want to export goods to India, a commercial finance company will check the credit of the business in India that you are selling to; this can facilitate capital for exponential growth to creditworthy customers. If you want to import goods from India, purchase order financing combined with accounts receivable financing can help you to achieve the same goal of increasing cash flow to grow your business.

Albert Einstein said: “We owe a lot to the Indians, who taught us how to count, without which no worthwhile scientific discovery could have been made”. Mark Twain said: “India is the cradle of the human race, the birthplace of human speech, the mother of history, the grandmother of legend, and the great grand mother of tradition. Our most valuable and most instructive materials in the history of man are treasured up in India only”.

The bottom line: India is a land of great problems and great opportunities. Accounts receivable financing combined with purchase order financing can help you succeed in this vast democratic, English speaking marketplace.

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