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Survey Shows Late Client Payments Affect Outsourcing Growth

by: Sarah Joson

Wednesday, December 14, 2011 | Outsourcing News |

Outsourcing Growth Impeded by Delayed Payments

A recent survey by consulting and outsourcing services provider Capgemini, together with Harris Interactive, revealed that executives of Fortune 1000 companies face the negative impact of delayed client payments to their outsourcing growth, recruitment process, and revenues.

Based on the Executive Insight Survey which was done online in September, twenty nine percent of respondents said delayed cash flow affects growth. Other areas that affect payment delays are hiring capabilities (27 percent) as well as revenues (20 percent). Late payments also affect the ability to offer wage increases, support on innovation, and investment in research and development.

Almost half (45 percent) of Fortune 1000 executives stated that they have experienced an increase in deferred payments from their clients, while 15 percent said they’ve seen a 25-percent increase in late payments last year.
    
There are several strategies companies can do to deal with payment delays. One of these is outsourcing cash collections. Majority of the companies that do so reported that it reduced their bad debt loss. They’ve also posted a 34-percent increase in profitability, and 32-percent growth in all points of the revenue cycle.


Source:
http://www.marketwatch.com/
 

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