Measuring the Performance of the Collection Staff
By Michael C. Dennis, MBA, CBF

Some credit managers find it difficult to find ways to monitor and measure the performance of their collection staff. Here are a few objective standards that performance can be measured against:

1. The number of active accounts handled by each collector.

2. The total amount past due.

3. The percent change in the past due amount from one month to the next.

4. The number of collection or deduction related calls made and received each day.

5. The number of complaints received from customers about the collector per month.

6. The DSO calculated for each collector's assigned customer base.

7. The average number of days from invoice delinquency to the first collection call.

8. The average number of days from first to the second collection call.

9. Bad debt losses as a percent of sales in the collector's account portfolio.

10. The total number of outstanding deductions in the collector's account base.

11. The number of deductions closed each month.

12. The number of days late or absent each month [excluding vacations]

13. The average number of days from the date a deduction is taken by a customer to the date the deduction is resolved by either [a] arranging for a credit to be issued, or [b] by contacting the customer to arrange for deductions taken in error to be repaid.

14. The time from receipt of a credit application to communication of the credit decision.

The average amount of time an order that is ultimately released from credit hold remains on hold before it is reviewed and approved.