How many times do you communicate with customers regarding past due invoices? This is an important metric for you to understand to improve your accounts receivable management. Each past due invoice should be emailed and called a minimum of 9-10 times through a standard collections cycle before the account is turned over to third party collections and before you pursue legal action. You can setup simple or advanced metrics to evaluate your communications. It can be as simple as communications per invoice across your entire portfolio of accounts, or it could be very detailed, broken down by invoice aging bucket, by customer type, or other criteria.
Something to consider is collector workload. It takes a minimum of 5 minutes for most people to draft an email and to attach invoices for email-based communications and it takes a minimum of 20 minutes for someone to call a customer, to conduct a phone conversation, resolve an issue, and note what they’ve done. This means that the average person can make just 3 phone calls per hour (assuming they reach a live person each time) OR they can send 12 emails per hour assuming they have access to the accounting system to create PDF copies of invoices.
As such, another accounts receivable management metric you should monitor is how much time your collectors are spending on calls and emails and whether they’re able to get through their task list or if there are tasks that they are unable to complete because they simply do not have enough time. Consider evaluating a credit and collection system to automate the mundane and routine email communications while presenting everything they need in a centralized system so they can make more calls and focus on higher priority issues.
Communications metrics should correlate to your overall accounts receivable numbers. The more you communicate with your customers – the lower your accounts receivable. Financial executives including CFOs, controllers, and credit managers will want to know if their collectors are efficient. How many calls and emails are they completing, what are the results, are some collectors more efficient or stronger in certain types of activities, and how can they train and manage their staff to be even more effective?
Anytime Collect includes a dashboard (below) providing top-line metrics to help you understand all of this – who has your cash, how long is it taking customers to pay you, what’s in dispute, when can you expect to get paid, and much, much more.