Executives and owners of companies today are focusing more than ever in profit margins. In the transportation industry, executives must invest time and money in closely measuring performance and results in detail and on a daily basis.
In collections, time is money. What is collected or recovered this week is in major part a reflection of those actions taken by the collections team one or two weeks prior. In his way, it is indispensable to have the tool that will provide measurable information related to the objectives attained by the collections team, including individual quality and quantity per each collector.
Having and utilizing key indicators in the collections department will bring about the following benefits:
– Serve as a base and foundation for results analysis.
– Supports establishing new policy and procedures.
– Executives know they count on clear and objective facts.
– Allows you to motivate and compensate your team based on achieved results.
The key indicators I suggest you use at the very least are: number of calls, number of communications sent, recovered amounts and number of accounts assigned to the agency. Remember, anything you can measure can be improved.
Number of Calls Made
It is very important to monitor the number of calls each Collections Executive makes each day. Although we live in the technology era, making contact directly through a phone call continues to be the best way to collect. Being able to establish the number of calls a collector is to make will, obviously, depend on the number of regular and past-due accounts each executive has been assigned. However, it must never be more than the actual capacity taking into account the phone system, the speed of the software used, and if applicable, the access to supporting documentation or archives for any clarification. In an 8-hour shift, a base number can be 40 actual phone calls, or 80 “dials”, where there was not necessarily contact made with the interested party because the line was busy, a message was left, or no one answered.
Number of Communications Sent
There is direct co-relation between the number of calls made and the number of communications sent by a collector, either by fax, email, messenger or cargo service. A written communication will enforce the phone call and all the collection actions taken. In the majority of the cases, it should serve as a payment reminder of confirmation of what transpired during the phone conversation. Measuring communications sent will serve to find out if the Executive is enforcing enough what transpires during his phone calls. It is advisable the total communications sent during the day are not less than 20% of the total number of calls placed.
I must emphasize that the recovered amounts are the reflection of the collection efforts put forth by the executive a week or two ago. When you compare the actions taken by the collector the week that is ending to the recovered amounts each day during that week, you will realize there is a direct correlation between actions taken and communications sent to the recovered amounts.
Assignments to Collection Agency
This is the key indicator for which you do not need set a goal. It only is important to include it so that you know how many clients were assigned to your agency during the week and not lose sight of this fact. If your company has more than 200 active clients, then it is very useful to include this key indicator. If you have a considerable volume of actual and new clients, it is of outmost importance you analyze if you have assigned accounts to the collections agency during the last two weeks or a month. If you have not assigned any account during the entire period, most likely, there will be accounts or clients who are falling through the cracks. I suggest you review the account load assigned to each collections executive.
Next is an example of a Table of Key Indicators where the objectives you establish are marked in gray, this being the suggested minimum, and always allowing room for improvement.
You can request the Table of Key Indicators by e-mail to email@example.com . Please include your name, company and let us know if you want the spreadsheet for windows (excel) of Mac (Numbers).