NACM Credit Congress: Taking a Look at Insourcing and Outsourcing

In recent years, outsourcing credit, collections and cash application functions to third-party agencies or overseas entities has become increasingly popular. Generally, this practice is part of a company’s cost saving strategies, said seasoned credit and collections professionals, Susan Turner, CCE, and Steve Renschen, CCE, both with Olympus Corporation, during the “Reversing the Trend: In is the New Out” education session at NACM’s 119th Credit Congress & Expo in St. Louis.

Other trends seen in accounts receivable departments include pressure from merger or acquisition activity. The departments must learn to do more with less, the duo said.Some companies, however, are recognizing that insourcing has benefits over outsourcing, Turner said. Oftentimes, “the level of service is just not there,” she said.

Among other elements Turner and Renschen covered was the benefits and potential pitfalls of acquiring a portfolio or insourcing accounts receivable management. Considerations therein include understanding the “new” portfolio, who the customers are and what the risks are; past practices, such as contact, escalation and dispute resolution; system needs, including EDI or IT resources; and the real cost of outsourcing, such as salary increases versus contract renewals. The duo also discussed intangible factors, including customer experience and the KPI trap.

- Diana Mota, NACM associate editor

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