The last few years were difficult for Accounts Receivable (A/R). Global economic and operational uncertainty forced millions of businesses to refocus on the importance of cash to ensure their survival. And practically speaking, that means pushing A/R and collections teams to collect more cash from a customer base that’s less likely to pay on time than ever.
That’s a tough task by anyone’s standards. But the upside is that this increased focus on cash has put A/R in the spotlight once more, and driven more organizations to think critically about how they measure and enable effective and productive collections.
If the last few years were times of disruption, we’re now heading into a year of recalibration. As companies focus on recovery and building their organizations back to full strength, their A/R teams and processes need to be able to work at maximum capacity.
To help, we’ve brought together five KPIs you should be measuring to get a comprehensive picture of A/R performance — and get a clearer idea of where and how your team’s performance can be improved.
The 5 Accounts Receivable KPIs are:
- KPI #1: Average Days Delinquent
- KPI #2: Days Sales Outstanding (DSO)
- KPI #3: Percentage of Current Accounts Receivable
- KPI #4: Collections Effectiveness Index (CEI)
- KPI #5: Operational Cost Per Collection