Most finance leaders can tell you what credit control costs on paper: a salary (or two), a system licence and the occasional legal letter. What’s more difficult to see is what it silently costs in trapped cash, missed growth, avoidable disputes and the gradual normalisation of late payments.
In the UK alone, late payment is estimated to cost the economy almost £11 billion per year – according to GOV.uk in July 2025. Those macro numbers show up in your ledger as rising Days Sales Outstanding (DSO), heavier collections workloads and a working-capital bigger than you should need.
Keeping credit control entirely in-house often feels safer. In practice, it can be the more expensive option because the hidden cost compounds.
The cost you feel but rarely quantify
Every extra day of DSO in cash you’ve already earned but can’t use.
A simple way to estimate the impact:
Cash tied up = (annual credit sales/365) x DSO days
If a business bills £10 million a year on credit terms, then:
- £10,000,000/365 = £27,397/day
- An extra 10 days of DSO ties up about £273,970 in working capital
That’s money not funding inventory, hiring, marketing, product development or debt reduction. What’s more, if you’re using an overdraft or revolving credit line to bridge the gap, the cash drag turns into a direct interest cost.
Late payment pressure isn’t hypothetical: government-based sources consistently highlight its economic and business-failure impact.
The people coverage gap
In-house credit control capacity is fragile:
- One resignation or long-term absence leads to slower collections
- Month-end, quarter-end and holidays are predictable bottlenecks
- Spikes in disputes or customer payment issues cause a backlog that age the ledger
Staffing isn’t just base salary, it’s employer NI, pension, management time, recruitment fees, training and the cost of vacancy.
For a rough UK benchmark, advertised-role data puts the average credit controller salary around £31k.
That’s before on-costs and the operational overhead of running the function.
Many firms don’t notice the full cost until the team is stretched – and then DSO creeps up quietly.
Admin errors and disputes are a major reason for late payment
A big chunk of late payments isn’t malicious; it’s often preventable friction. The UK government research found businesses most often attributed paying suppliers late due to:
- 36% admin errors
- 31% disputed invoices
- 23% technical issues
Translate that to receivables: if your invoicing, documentation, PO matching, proof-of-delivery or query resolution is slow, your collections team is stuck chasing payments that were never going to arrive on time anyway.
This is where specialist external providers can outperform – because they industrialise the workflow around disputes, data hygiene and consistent follow-up.
DSO and payment behaviour are moving targets
Late payment continues to be a persistent issue for businesses across Europe, with many companies reporting ongoing disruption to cash flow. Payment performance can shift quickly as economic conditions change, meaning last year’s processes may not be sufficient today.
In-house teams can stay on top of this, but only with the right capacity, tools and governance – otherwise inefficiencies and hidden costs can steadily increase.
Technology and analytics don’t always equal performance
Collections outcomes improve when you can segment, prioritise and intervene early – before invoices become aged debt. In practice, many in-house teams rely on manual routines (spreadsheets, inbox chasing and inconsistent notes).
Analyst and benchmarking bodies consistently conclude that manual invoice handling embeds avoidable cost through labour-heavy processes and delays. Automated workflows materially reduce these inefficiencies, resulting in significantly lower unit costs and more scalable operations – a finding that holds across industries and organisational sizes.
Even if you don’t overhaul systems, external partners often bring:
- structured cadences (pre-due reminders, due date prompts and post-due workflows)
- multi-channel outreach
- prioritisation rules dispute workflows
- and reporting consistently that lean in-house teams often struggle to sustain.
Outsourcing often is the best choice when it comes down to resilience and measurable outcomes
Outsourcing works best when you treat it as an extension of finance – not a last-resort debt collection button. What strong external partners typically provide:
- Elastic capacity
More coverage during peak periods, without hiring cycles.
- Process discipline
Consistent workflows reduce invoice aging and dispute stagnation.
- Performance visibility
Better management information: DSO drivers, dispute reasons, promise-to-pay reliability and segmentation.
- Economics
Large, recent benchmarking studies on shared services and outsourcing commonly report significant value creation: Deloitte’s 2025 Global Business Services Survey shows that about 55% of organisations with a global GBS leader role achieved more than 20% average savings from their GBS models, with results varying by maturity and scope.
Deloitte’s most recent Global Outsourcing Survey (2024) also highlights that a strong majority of executives plan to maintain or increase outsourcing investment, with cost optimisation, access to specialised talent and organisational agility among the key drivers.
Importantly: outsourcing doesn’t have to mean ‘handing over the keys’. Many firms keep credit policy and key account relationships in-house, while outsourcing:
- routine follow-up
- dispute triage
- ledger hygiene
- and aged debt escalation.
Checklist for your in-house credit control
If you recognise two or more, you’re likely paying the silent in-house premium:
- DSO has drifted up and ‘that’s just how the market is now’
- One team absence causes a measurable collections slowdown
- High levels of disputes or invoice queries sit unresolved for weeks
- Sales and finance disagree on when to escalate
- Collections activity is hard to evidence (limited notes, limited reporting)
- Lacking segmentation (all customers get the same chasing approach)
- Month-end collections become a fire drill
More from Baker Ing
In-house credit control isn’t bad but it’s frequently under-resourced, under-tooled and asked to deliver enterprise-level outcomes with small-team constraints.
Outsourcing can convert credit control from a fragile, labour-heavy function into a measured working-capital lever, with better coverage, tighter process and clearer accountability. And in a late-payment environment that government sources put at ~£11bn annual economic impact, pulling cash forward by even a handful of days can be a material advantage.
If your growth plan depends on cash certainty, the question isn’t ‘Can we chase invoices internally?’ It’s: ‘What is our current DSO silently costing us and what would that cash unlock if we released it?’.
For more advice, speak to our expert credit advisers at Baker Ing.