5 Critical Factors Insurance Carriers Must Key in While Outsourcing Accounts Receivable Services

Accounts receivable services is a major problem area for insurance carriers. Factors such as increasing days sales outstanding (DSO), legacy soft tools, and overall non-intuitive accounting functions are clogging the revenue streams of insurance agencies.

The Q2 US Accounts Receivable and Days Sales Outstanding Industry Report by Dun & Bradstreet and the Credit Research Foundation stated that about over 10 out of 211 industries reported accruing over 10% ARs that are more than 90 days old.

In 2022, insurance carriers must streamline their accounts receivable management services for sales expansion, increase ROI prospects, and minimize the cost of operations.

As an insurer, you must uplift the quality and speed of billing and receivable services to achieve the objectives stated above. However, it is easier said than done. The reason is billing and receivables services entail a lot of administrative tasks. These tasks are extensive, difficult to keep track of and require individual attention.

If you are a small or medium-sized insurance carrier, you may not have enough elbow room to dedicate resources to specific accounts payable and receivable services tasks. Such tasks include ledger organization, communication with customers, and others.

This is motivating them to outsource this function to third-party vendors. On this note, here are five factors that insurance carriers must consider while outsourcing accounts receivable services.

Top 5 Factors to Consider While Outsourcing Accounts Receivable Management Services

Here’s a low down of the five key things that an insurance company must consider for accounts receivable outsourcing services.

Conduct a Thorough Requirement Analysis

You must know the area where you need help the most. This will help the outsourcing vendor to work around that area and align to your needs in the best possible way.

Every insurance carrier must start with a self-requirement analysis to understand their accounts receivable needs. They must drill down to evaluate details like invoice processing cost optimization, problematic write-offs, bleeding clients because of a slow process, and others.

An ideal insurance accounts payable and receivable services vendor would strategize ways to fit your needs. This includes special training to agents as per the niche needs of  client.

Understand if Your Vendor is an Accounts Receivable Service Specialist

The disadvantage of partnering with a multi-service provider is they may or may not put their undivided focus on the area that you are outsourcing.

There are chances that such a vendor may delegate a resource that juggles multiple services in a day. This limits their bandwidth to react and respond to your queries or issues right off the bat because they lack domain knowledge.

For instance, only an accounts receivable service specialist will know how to tap into the financial data of a customer to single out those exhibiting high payment failure risk. This will help you to single out those accounts and cut short delinquency.

At least, you must ensure that your vendor delegates a team of professionals that have expertise in the insurance accounts receivable service domain. The team should be always dedicated to your exclusive needs.

Determine if Vendors Take a Customer Service Approach

You must ensure that your accounts receivable outsourcing services provider takes a customer service approach in their mode of operation. This is a critical determinant if you choose to entrust customer communication to your vendor.

Customer communication includes tasks like sending payment reminders, delivering invoices, and others. An efficient accounts receivable services expert will know the right way to communicate with your customers without giving them the collection agency vibes.

Ensure that they streamline the framework of dispatching reminders, prepare AI invoice reports, and feed them into your system. Such a streamlined system will aid you to send out periodic statements to your clients.

Analyze Your Vendor’s System Compatibility

It is imperative to analyze the accounts receivable outsourcing services provider’s system compatibility with your legacy infrastructure. Ignoring this parameter is a one-way ticket to a severe loss of ROI and resources.

System incompatibility will oblige you to fit your system infrastructure with newer components. Or look for a new vendor altogether. Both of these scenarios have a deep impact on your operational costs and management efforts.

Ideally, you must insist to do a pilot project with your prospective accounts receivable services vendor to understand their mode of operation and most importantly, their infrastructure.

Consider the Industry Experience of Your Vendor

Finally, it is the experience of your prospective vendor in the insurance accounts receivable services domain that matters the most.

The advantages of partnering with a vendor with extensive industry experience are:

• Minimal to zero handholding during the contract lifecycle
• Stay updated with regulatory changes that impact operations in the accounts receivables field.
• Proactive feedback on billing and receivables process improvement.
• Strict compliance with gold-standard process best practices.

How We Assist You with Fool-proof Insurance Accounts Receivable Services

The economy is changing at a rapid pace every day. Such changes have an impact the financial health of an individual or an organization. As a result, it takes a direct hit on enterprises’ AR collections because of delayed repayments.

Insurance carriers are finding it increasingly difficult to cater to the coverage of such impacted enterprises. As an insurer, you must focus all your core resources and time on policy development strategies instead of being held back by administrative tasks.

We, at Insurance Backoffice Pro, do beyond just the administrative tasks for you. Our team of insurance experts is highly capable of recording and maintaining a central database of bills accrued by your clients. They take charge of business-critical functions like reimbursement determination, tracking bill details, obtaining insurance information, and assigning them to individual customer profiles.

Our experts leverage highly advanced technologies to provide categorized invoices on yearly, quarterly, and monthly billing reports to insurance brokers and agencies. We track and maintain insurance premium payment records on your behalf.

As an industry expert, we believe in delivering customer-centric solutions. This is why we help you with process improvement pointers. These pointers aid you to focus on measures like customer saves and first-call resolution.

We have a compliance management system, ongoing agent training, and call monitoring systems in place. This infrastructure helps us to stay ahead in the process improvement race that helps you get an edge over your competitors.

Who We Are and What Makes Us Industry Experts

This article is authored by experts at Insurance Back Office Pro. We have over 108 years of experience in providing end-to-end back office billing and receivables services to insurance carriers, agents, and brokers. Our customized solutions have helped insurers of all sizes to get a competitive advantage in the market and provide the best customer experience.