How Mid-Sized Manufacturers Cut Costs by 50% with Outsourced Accounts Receivable Services

Introduction

When you’re a mid-sized manufacturer, your focus is steel beams, printed circuits, pressure gauges, packaging films, and such. You are really not interested in reconciling delayed invoices and navigating customer payment excuses. Unpaid invoices can turn your business from a manufacturing unit into a bank where cash returns slowly.

An unconventional yet increasingly popular decision that many small businesses are resorting to is to outsource accounts receivable services. Manufacturers that make this pivot are discovering financial relief, operational clarity, and finally, financial control of their businesses.

Table of Contents

1. Why Mid-Sized Manufacturers Face the AR Trap
2. The True Costs of an In-House AR Department
3. How Outsourced Accounts Receivable Services Save Money
4. The 30–50% Annual Cost Reduction: A Real-World Breakdown
5. Beyond the Ledger: Hidden Benefits of Outsourcing AR
6. Why Mid-Sized is the Right Size for Outsourcing
7. Choosing the Right Partner: What to Look For
8. FAQs
9. Conclusion

Why Mid-Sized Manufacturers Face the AR Trap

Mid-sized manufacturers walk a financial tightrope. They are too big to run lean and too small to afford enterprise-grade infrastructure. Accounts receivable often end up wedged somewhere between “someone’s job” and “nobody’s priority.” The result is payment delays, disorganized invoicing, overlooked follow-ups, and rising days sales outstanding (DSO).

This cash flow problem becomes a credibility issue with stakeholders and a momentum killer for growth. It creates what we might call a sluggishness in the business, where energy is spent chasing dollars already earned instead of winning new ones.

The True Costs of an In-House AR Department

Costs involved in running an in-house department:

• Hiring: You may need to hire more than just one person. You will need an AR specialist, collections executive, and maybe even an AR manager.
• Training: Employees must be trained in Invoicing tools, compliance policies, and customer handling techniques.
• Software Licenses: The software includes ERP systems, invoice tracking, and payment gateways.
• Workstations: The company has to provide hardware, desk space, insurance, and benefits.
• Process Audits & Error Management: AR tasks when done poorly are worse than not done at all.

By the time you’re done building and maintaining this AR ecosystem, the cost moves from being just fiscal to emotional and temporal.

How Outsourced Accounts Receivable Services Save Money

Here’s where the benefits of outsourced accounts receivable services come to the fore. You eliminate most of the above when you find your partner. No full-time salaries, no software overheads, and no training sessions or exit interviews. Just performance-based billing, clear deliverables, and instant scalability.

The external AR partner handles:

• Invoice generation and delivery
• Payment reminders and collections
• Dispute resolution
• Reporting and analytics
• Integration with your existing systems

You get results thanks to the trained professionals, specialized tools, and proven workflows, and you do not have to own any of them.

The 30–50% Annual Cost Reduction: A Real-World Breakdown

Let’s understand the scene with a hypothetical. Suppose your internal AR costs total $120,000 annually for salaries, tools, training, and infrastructure.

Now switch to a top-tier accounts receivable services provider like Vserve. You only pay for what’s processed, collected, and managed. That means:

• No idle-time costs
• No attrition-related training expenses
• No software upgrades to worry about

The result is a total AR management expense of $60,000–$80,000 per year, with even better performance metrics. You get savings of 30–50% annually without sacrificing quality. And you also get to see improved DSO, higher collection rates, and happier customers.

Hidden Benefits of Outsourcing AR

The fiscal savings are just the starting point.

• Speed to scale: You can go from 100 to 1,000 invoices/month, but no new hires needed.
• Risk management: AR providers specialize in compliance, data security, and audit-readiness.
• Focus: Your finance team shifts focus to strategy, not chasing down overdue payments.
• Customer experience: Professional AR teams handle follow-ups delicately, preserving business relationships.

It’s a surprisingly easy solution to what was once an operational nightmare.

Why Mid-Sized is the Right Size for Outsourcing

Outsourcing always works out for mid-sized manufacturers.

• You have enough volume to need expertise.
• You’re cost-conscious.
• You want agility without sacrificing quality.
• You don’t have the luxury of financial inefficiency.

Choosing the Right Partner: What to Look For

Not all AR service providers might be able to help your business. Choose one with:

• Proven experience in manufacturing AR workflows
• Transparent pricing models
• Tech integration capabilities
• Real-time reporting and communication channels
• A scalable team structure

And if you’re wondering who checks all those boxes, Vserve does.

FAQs

1. Is outsourcing AR safe for manufacturing businesses?
Absolutely. Reputed providers ensure compliance, confidentiality, and financial accuracy. In many cases, they improve it.

2. What should I expect during the transition?
You should expect data migration, system integration, and workflow alignment. Most good providers, like Vserve, handle this smoothly within a few weeks.

3. Will I lose visibility over my receivables?
No. Most providers offer real-time dashboards, status updates, and performance metrics.

4. Can I outsource only part of my AR process?
Yes. Many manufacturers start by outsourcing collections or invoicing, then expand based on results.

5. What if my business grows or shrinks?
Outsourced accounts receivable services are built to scale up or down flexibly without additional costs.

Conclusion

To build a robust AR department from scratch is to accept significant cost and complexity, but you don’t have to anymore. Mid-sized manufacturers across industries are ditching the traditional in-house model. They are choosing accounts receivable services that scale, perform, and save. More than corner-cutting, the benefit is precision decision-making.

So, if you’re still wrestling with overdue invoices and bloated AR overheads, perhaps it’s time to stop managing and start transforming.

Vserve offers accounts receivable services tailored specifically for manufacturing businesses. From invoice creation to payment collection, we streamline your AR so you can focus on making, building, and delivering. Cut costs, improve cash flow, and reclaim control. Talk to our AR specialists today. 👉 Get a free AR consultation with Vserve.