MeasureAbility
There are many, many Metrics that can be derived from Credit Activity, Staff and Customer Performance. To give you a start to thinking about those that may be relevant to your business we provide the [partial] listing below.
Please note Creditability® is NOT advocating ANY or ALL of these Metrics may be, or should be, relevant to you and your business.
With every Metric listed there can be different methods of calculation, e.g. do we include Cash Sales over the counter as part of 'Sales' when calculating DSO when there was no specific action on the part pf the Credit staff? or, should amounts deducted and unresolved form part of the overdue $ / % calculations ... and therein lie some of the problems with Benchmarking. Different things can and do mean different things to different people.
Creditability® believe it relevant to identify those Key Business Metrics that are indicative of your performance and those that provide early warning signs for Customers requiring closer attention.
We can assist in the development of appropriate Reports and Dashboards easily updated with current data and controlled by you.
Please note Creditability® is NOT advocating ANY or ALL of these Metrics may be, or should be, relevant to you and your business.
With every Metric listed there can be different methods of calculation, e.g. do we include Cash Sales over the counter as part of 'Sales' when calculating DSO when there was no specific action on the part pf the Credit staff? or, should amounts deducted and unresolved form part of the overdue $ / % calculations ... and therein lie some of the problems with Benchmarking. Different things can and do mean different things to different people.
Creditability® believe it relevant to identify those Key Business Metrics that are indicative of your performance and those that provide early warning signs for Customers requiring closer attention.
We can assist in the development of appropriate Reports and Dashboards easily updated with current data and controlled by you.
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PAYMENT PERFORMANCE
Days sales Outstanding; Best Possible Days Sales Outstanding; Average Days Delinquent or Overdue; Collection Effectiveness Index; Percent Current; Percent Greater Than 60/90 Days; Percent Greater Than 180 Days; Gross Bad Debt as % of Sales; Bad Debt Recovery as % of Sales; Net Bad Debt as % of Sales; Deductions as % of Total $ Outstanding; Deductions as % of the Number of Invoices Generated.. CUSTOMER METRICS Top 10 Customers as % of Sales; Top 20 Customers as % of Sales; Invoice Size; Number of Invoices Per Customer; Number of Active Customer; Primary Customer Type; Top 10 Customers as a Percentage of Total Outstanding; Top 20 Customers as a Percentage of Total Outstanding; Percentage 'Roll' from One Age Category to the next; Number of Deductions Processed; Deductions Per Employee; Cost of Deduction Processed as % of Sales; Deduction Turnover; Salary Per Deductions Employee; Deductions as % of Sales; Deduction Balances Included in AR Portfolio. EFFICIENCY METRICS Various costs per transaction; Employee salary for Credit / Risk, Cash Application, Collections and Miscellaneous COST ANALYSIS METRICS Collection expenses; Outside Services; Outsourcing Costs, Credit-related Travel Costs; Occupancy / Rental Costs; IT Systems Depreciation / Amortization; Total Cost as % of Total Sales, Total Costs; Per Credit Employee v. Total Net Company Employees; % of FTE Salary Benefits; Per Customer and Per Employee VOLUME METRICS / BUSINESS PRACTICE METRICS Late Payment Fees Recovered; Credit Card Payments; Direct Debit automatically to Credit Cards; Discounts Given; % of Late Payment Charges Ultimately Collected; Annual $ of Credit Card Sales as % of Sales, Electronic Invoicing, Electronic Payments; Auto Write-off; % of Companies using Auto-cash Systems; $ Amount / Frequency Shipped Automatically to New Customers with No Credit Investigation; % of Customers in Highest [Top Third] Risk Category. |
