If you had a collector that couldn’t bring any cash back into your company coffers, that person would be shown the door, pronto. What about your crack collectors? Are they getting better at collecting more cash faster?

With the vast majority of CFOs reporting their customers stretching payments, no company can afford not to have these folks at the top of their game. It may be a fight for certain dollars.

So are your people improving? Consider comparing your own collectors against these benchmarks from the Credit Research Foundation (CRF).

Take a look at your own collection metrics over the past five years. Then see how you stack up against this five-year trend:

• Median change in A/R handled per collector: a 4.30% increase
• Overall growth in collection productivity: up 6.59%.

[To calculate your productivity, according to the CRF, take: (% change in sales per employee from year one to year two minus the average capital investment in technology as a % of labor) multiplied by the % change in A/R per employee from Year 1 to Year 2.]

No matter where you stand in relation to these benchmarks, now may be a time to step up your measurements. Two great ways to do that:

1. Mix in some new measurements. Maybe you’re doing OK according to your usual Days Sales Outstanding (DSO) yardstick. Even some minor tweaks or supplements might give you a clearer picture: Best Possible Days Sales Outstanding, Average Days Delinquent, Collection Effectiveness, etc.
2. Get collectors involved in goal setting. Based on what you find, you’ll have some new priorities for your collectors. By letting individual staffers have some say in how they’ll raise the bar, they’ll likely be a lot more motivated to reach it.

Tags: Accounts Receivable, Benchmarking, Cash flow, collections, metrics