Think About Where You Are NowBefore you can identify areas for progress and come up with ways to troubleshoot, you need to think critically about where you are now. What is your current situation, your starting point? What are your AR weaknesses? Do you extend credit to too many clients and customers who are not truly qualified for it? Are your procedures for following up with past-due accounts efficient, or are they leaving something to be desired? Take a critical look at your existing procedures and reports to look for trends or concerning numbers. Poor AR practices take money, time and productivity away from your business. Therefore, the time you invest in goal setting for your AR department is well worth it.
Departmental GoalsNext, you should set Key Performance Indicators (KPIs) for your departments as a whole. Some of these can include:
- Days Sales Oustanding (DSO)
- Average Days Delinquent (ADD)
- Accounts Receivable Turnover Ratio (ART)
- Collection Effectiveness Index (CEI)
Individual GoalsNext, you should add in individual goals for all of your AR workers. These can be more personal things, like career development or specific collections goals. Some starting points could include:
- Credit Goals
- The number of days to respond to credit requests
- The number of credit updates on existing accounts
- Invoicing Goals
- The frequency of invoice errors
- The number of days required to issue an invoice
- Collection Goals
- The frequency of collection calls to make per day
- The number of days required to resolve chargebacks or invoice disputes
- The percentage of accounts receivable past 30 days due
Goal Setting for Your AR DepartmentOnce you set goals, set dates to review them and reassess. Whether it’s on a monthly basis or quarterly basis, take time as individuals and a team to examine your progress and decide how to move forward. If you need help reaching some of your goals, like making collection calls or keeping your AR on track with collections assistance, Alacrity Collections can be the partner that your business needs. We work with AR departments of all sizes to streamline things and ensure a rapid collections process.
Partner with Alacrity Collections for Excellent Collections ServicesAlacrity Collections is proud to be a leader in debt collections since 1982. We achieve great results that are over twice the national average and treat all of our customers with dignity and respect. We work tirelessly to protect your brand and improve your net returns. Alacrity recommends sending overdue accounts to collections no later than 120 days from date of sale or service for most industries. In the case of healthcare, overdue receivables should be submitted to collections at 180 days from date of service. To learn more about our services, please call us at 1-800-752-9663 or set up a phone appointment directly on our representative’s calendar via this link: www.calendly.com/hheemann.
Other Posts You May be Interested In:
- Our Best Tips for Managing Your Accounts Receivables Department
- When Is It Time to Fire a Client Over Unpaid Invoices?
- When Do You Need a Collection Agency?
- Collecting from Consumers Versus Businesses