Business Consulting Firm hired to decide if a 35 employee electrical Research Paper

Business Consulting Firm hired to decide if a 35 employee electrical construction and service company should outsource its past - Research Paper Example This study intends to consider the extent of advantages attributed to outsourcing of services of account receivables and the necessity of maintain good customer relations. This study reveals that company’s biggest challenge is to collect the funds from its numerous clients. It is imperative to note that, some of the impediments promoting this situation include lack of strong internal controls guiding financial matters. For instance, the company lacks internal controls guiding billing and collection efforts (Sirota, James & Tantor media, 2008). The departments intended to ensure that, due diligence in collection efforts has been exercised seem to be inexistent. It is significant to note that, due diligence is satisfied when the client’s statements or invoices are mailed monthly or at the agreed payment period. The clients should be billed shortly before the end of the current service delivery period, such that the client can make prior arrangements for payment. In additi on, exceptional reminders or collection mails for the past due accounts should be sent to clients. However, provisions should provide that discontinuing of services for delinquent clients be implemented after certain duration. This study reveals that, the company has lost a lot of money through non-payment by clients due to poor collection methods attributed to the limited number of employees. An apt internal control for collection of debts and monitoring accounts receivable is fundamental in any firm because it helps solve current business problems and helps prevent fraud from occurring. More over, it creates confidence on the public and other investors and strong controls. These aspects ensure transparency, accountability and enhance a vivid flow of funds collected from the clients (Sirota, 2008). This situation leads to the investigation of the advantages attributed to the outsourcing services. Essentially, outsourcing refers to the act of contracting out a business process or fu nction, which the organization may have performed internally and due to inefficiency or expansion of a business, it opts to subcontract it to an external company. It s noteworthy that, outsourcing is a common feature of modern economy (Sirota, 2008). The outsourcing deal may include transfer of employees and assets involved in the outsourcing partner. The company in this context will find numerous advantages in outsourcing its account receivable process alongside keeping good relations with its clientele. It is essential to note that, the outsourcing partner will embark on tracking of clients who do not pay the service dues. The advantages attributed to the outsourcing company include Facilitating more focus on core activities In a rapid growth periods, the back office operations of a company are likely to expand. This development may begin to guzzle both human and financial resources at the cost of the core deeds of the company’s success (Sirota, 2008). Outsourcing these ope rations will permit refocusing on the core actions of the business without sacrificing quality or service in the back office. This may include company marketing, opening of new branches employee motivation and empowerment. Reduced overhead Essentially, overhead costs of performing back office functions are extremely high. For instance, the expense incurred in collecting debts from numerous clients is considerably high, and it might affect the smooth running of the firm (Newell, 2010). Outsourcing enables a firm to perform the outsourced function in at