Most businesses have some accounts payable and accounts receivable system or process in place, whether formal or informal. Accounts payable, or, the amount a company owes after purchasing goods or services on credit from a supplier, must be kept in check to avoid accumulating large amounts of debt. Accounts receivable, on the other hand, are assets – these are amounts that a company has a right to collect after having sold goods or services on credit to a customer or client.
Although managing accounts payable and accounts receivable may sound like a task every business needs to handle on their own, it is possible for accountants and bookkeepers to create a business opportunity out of this back office work.
There are a several reasons why selling AP and AR services to clients can be lucrative in the long run.
- New technology does most of the work
- You can charge a premium for a value-add service
- Grow your practice through referrals
- You gain exposure to data you wouldn’t otherwise have
- You’ll be able to provide better insights and advice to all clients
New technology does most of the work
With new technology and software available, managing the AP and AR of another business need not be as daunting as it sounds. Tech makes it easier for you to keep track of all the details and get a clear snapshot of both sides of AP and AR. Unlike years past when this software wasn’t readily available, nowadays you won’t have to spend several hours manually recording every payment.
You can charge a premium for a value-add service
Most business owners don’t want to be bogged down with the tasks involved in AP and AR. They know it’s a necessity, but when push comes to shove, would rather be investing their time in building their business. For this reason, offering a service that manages AP and AR can be of enormous value, as many business owners understand the impact, but would rather pay someone else to do this for them than have to spend time on it themselves.
Grow your practice through referrals
As is the case in most industries, entrepreneurs often know other entrepreneurs. And most entrepreneurs are like-minded in the sense that their primary goal is to grow their business, not manage administrative tasks. If you can provide valuable AP and AR services to one business owner, there is a chance you will receive additional clients through word of mouth – thus growing your own business.
You gain exposure to data you wouldn’t otherwise have
By offering an AP and AR service to another business, you will be able to understand their expenses and revenue firsthand. This information gives you diverse examples of what is working and what isn't as the business tries to create steady profit. You can use this data and knowledge to provide insights and advice to help them grow their business, enabling you to take on a consultative role.
You’ll be able to provide better insights and advice to all clients
The data you become familiar with during the process isn’t just useful for you alone – it can also help you provide better insights and advice to other clients. By developing a solid understanding of how AP and AR work across other business, you’ll become an expert in a niche area that many business owners typically don’t want to put effort into mastering themselves.
The work that many don’t want to do themselves can be a great opportunity for other entrepreneurs willing to seek it out. By selling AP and AR services to clients, you will be able to position yourself and what you offer as a valuable asset to many business owners, regardless of their industry or field.