You may have hired an outsource billing service because you wanted to help your cash flow or improve your bottom line. An outsource billing service will do this for both companies and local governments, but it's important to keep some facts in mind to make sure that they're working for you in the best manner possible. Following are the things you most need to know about your outsource billing service.

Both private companies and municipal governments may hire outsource billing services not only to get billing taken care of, but also because of collections problems. Many collection agencies also handle billing, and vice versa. Ask your billing service or collection agency if they take care of the collections process from start to finish. If they do, you can be sure that your collections will be handled smoothly and efficiently. If not, you may want to switch to a service that does both.

Think about it this way. If you're working with a billing service but don't have them doing your collections, when accounts start reaching the troubling milestone of 60 days past due, you'll waste time looking for someone else to handle the collections process.

That time window can make the difference between getting a good percentage of the money owed to you back and getting nothing. Statistics show that after 60 days the chances of getting a return drop steeply the more time goes on. If your billing service can handle collections without an exchange of files, it's much more efficient and much more likely that you'll get your money back.

However, this is not the only reason to hire an outsource billing service. Outsource billing services do billing for a large number of clients. For this reason, they get serious discounts in operational areas that relate to collections, such as phone bills, mass mailings, etc. If you are collecting on 500 accounts and your outsource billing service is collecting on 50,000 accounts, it's a no brainer that their costs will be lower.

There is no reason to pay more and to waste the resources of your accounting department or your sales department on billing or collections of any kind. Hire professionals, pay less for operational costs and free up your own staff to work on more productive, business-generating tasks. When you're looking for an outsource billing service, ask them how many accounts they service in your industry. In this case, the more the better because of the cost savings.

Of course, if you hire an outsource billing service you will have to pay them a monthly fee, while many if not most collections agencies only charge a percentage of any money they recover. This is a serious benefit to the cash flow of any business or governmental department, so when you're interviewing potential outsource billing services, ask if they are willing to take a monthly fee for the billing services, but a percentage of the take for collections services.

The final thing to remember when choosing an outsource billing service is that you don't want to just turn over your billing to an outside party and then completely forget about it. Although it's better to have a third party perform these functions, you also want to keep an eye on things to make sure that they're being done properly and going smoothly. For this reason, an outsource billing service that provides you with online access to all billing concerns is preferable to one that provides you with written reports.