Simplify Your Finances With Outsourcing Accounts Receivable Services for Energy and Utilities

Effective management of accounts receivable is crucial in the energy and utilities sector. With high volumes of transactions, strict regulatory requirements, and the need for precise billing, companies in this industry need to ensure efficient cash flow.

Many of these organizations choose to outsource accounts receivable services for energy and utilities and delegate this complex and time-consuming process to external providers.

This allows them to focus on their core competencies and respond to the many changes affecting the energy sector while ensuring that experts handle their financial processes.

In this article, discover the benefits of outsourcing accounts receivable services for energy and utility companies, the processes involved, and the expertise leading outsourcing firms provide.

4 Benefits of Outsourcing Accounts Receivable for Energy and Utility Companies

Here are four impactful benefits that make it a compelling choice to outsource accounts receivable services for energy and utility organizations.

Faster payments

Professional service providers utilize advanced systems and follow-up strategies to ensure that invoices are paid promptly. This leads to a significant reduction in the time it takes to receive payments, improving your company’s overall cash flow and reducing the risk of bad debt.

Increased accuracy

Accuracy in billing and invoicing is critical for maintaining customer trust and avoiding disputes. 

Outsourced accountants have specialized expertise and technologies that help ensure accurate and timely invoicing, reducing errors that can lead to payment delays. This level of precision is especially important in the energy and utilities sector, where even small errors can result in significant financial discrepancies.

Enhanced cash flow management

Cash flow is a significant concern for energy and utility businesses in the US. Electric utilities in the US had a negative free cash flow of over $87 billion in 2023, one of the lowest values reported in this century.

By outsourcing accounts receivable services, you can benefit from consistent and predictable cash flow, allowing for better financial planning and resource allocation. 

Outsourced accounting services typically include regular financial reporting and analysis that helps businesses monitor their cash flow and make informed decisions.

Cost reduction

Maintaining an in-house accounts receivable team can be expensive, particularly when considering salaries, benefits, training, and the cost of software and infrastructure. 

Outsourcing these services can lead to significant cost savings by eliminating the need for overhead expenses. Additionally, outsourcing can help you avoid the costs associated with errors and inefficiencies in the accounts receivable process caused by a lack of in-house knowledge.

Accounts Receivable Services That Can Be Outsourced for the Energy Sector

The following accounts receivable services are popularly outsourced by energy and utility companies to enhance cash flow management and reduce the risk of financial losses.

Invoicing and billing

Outsourcing invoicing and billing services ensures all customer invoices are generated and sent out accurately and on time. This includes managing complex billing cycles, applying correct rates, and ensuring compliance with industry regulations.

Payment processing

An outsourced payment processing service handles the receipt and recording of payments, ensuring that all transactions are processed efficiently and securely. 

This includes processing various forms of payment, such as checks, electronic transfers, and credit card payments, and applying them to the correct accounts.

Collections management

Reshaping their credit and collections processes can allow utility companies to reduce bad debt by as much as 10% within a single year. Outsourcing collections management helps energy and utility companies efficiently recover outstanding payments. 

Outsourced collectors use proven strategies and tools to follow up on overdue accounts, negotiate payment plans, and take appropriate action to collect unpaid debts while maintaining customer relationships.

Reporting and reconciliation

Outsourced collectors can provide detailed financial reports and reconciliation services. This includes reconciling customer accounts, resolving discrepancies, and providing insights into the financial performance of the receivables function.

Credit risk assessment and management

Assessing clients’ credit risk and managing credit limits are essential to prevent bad debts. By outsourcing this service, you can leverage the expertise of specialists to evaluate creditworthiness and set appropriate credit policies, reducing the risk of financial loss.

Top 5 Accounts Receivable Outsourcing Partners for the Energy and Utilities Sector

In no specific order, here are today’s best partners to outsource accounts receivable services for energy and utilities.

1. Near

We put ourselves at the top of this list because we are dedicated to providing comprehensive support in finding the right talent for every client.

Partnering with Near means gaining access to a dedicated team that will help you find the best remote accounting talent from Latin America (LatAm) to expertly handle your accounts receivables and achieve better cash flow management.

With our comprehensive hiring services, we can help businesses in the utilities and energy industry hire accounts receivable specialists within 21 days.

2. Superstaff

Superstaff provides back-office support, including accounts payable and receivable, to organizations in the energy and utilities sector.

Its comprehensive approach to providing outsourced accounting services makes it a reliable partner for sustainable financial growth powered by expert bookkeepers, controllers, and forensic accountants.

3. ARDEM Incorporated

ARDEM offers its outsourced finance and accounting services to the utilities and energy sector, providing clients with a comprehensive solution for invoice and cash flow management.

Its expertise in blending business process automation with human expertise results in accurate, reliable, and timely accounts receivable services for its clients.

4. EXL Service

EXL Service offers comprehensive outsourcing solutions for the utilities sector, covering data-driven financial solutions for better cash flow management.

Its deep expertise in data-driven strategies makes it a top choice for energy and utility organizations that seek to enhance accounts receivable management while improving clients’ experience.

5. Infosys BPM

Infosys BPM offers comprehensive business process management outsourcing services for energy and utility companies, including handling finance and accounting processes. 

Its services are supported by advanced analytics and automation tools, making it a top choice for organizations looking to achieve accuracy and efficiency in their accounts receivable function.

Strategies for Choosing the Right Outsourcing Partner

Finding the right external partner is key to successfully outsourcing accounts receivable services in the energy and utilities sector. Here are a few guidelines to follow.

Assess the provider’s industry expertise

When selecting an accounting outsourcing partner, it’s essential to choose a provider with advanced knowledge of the energy and utilities sector. 

Industry-specific expertise ensures that the provider understands the unique challenges and regulatory requirements of your business, leading to more effective and compliant service delivery.

Evaluate technology capabilities

The right outsourcing partner should provide access to advanced technology capabilities, including automation, analytics, and security features, to support your accounts receivable processes. 

Evaluate the provider’s technology stack to ensure it can handle your company’s volume and complexity of transactions while providing the necessary insights and data management tools.

Understand service-level agreements

Service-level agreements (SLAs) are critical in defining the expectations and responsibilities of both parties. Review the SLAs carefully to ensure they align with your business needs, including response times, accuracy requirements, and performance metrics. 

Clear SLAs help prevent misunderstandings and ensure that the outsourcing relationship will meet your business objectives.

Review client feedback

Reviewing feedback from other clients can provide valuable insights into an outsourcing provider’s reliability, service quality, and customer support. 

Look for reviews, testimonials, and case studies that highlight the provider’s track record in serving energy and utility companies.

Final Thoughts

Outsourcing accounts receivable services for energy and utility companies is a strategic move that can lead to faster payments, increased accuracy, enhanced cash flow management, and significant cost reductions. 

By partnering with the right service provider, you can streamline your financial operations, reduce overhead costs, and better focus on your core business activities.

With the many issues and changes that the energy sector has to address today, outsourcing can provide organizations in the industry a greater opportunity to handle the tasks that matter most while leaving accounts receivable to skilled professionals.

If you’re prepared to take this step, Near is ready to help you outsource accounts receivable services to top-tier, pre-vetted accounting professionals from LatAm. Our tailored services will ensure that you find the right talent to expertly handle your cash flows at competitive rates.

Contact us today for a free consultation, and discover how outsourcing can be a powerful tool for improving your financial performance.