Tag: Metrics

Payment delinquency is a common but costly reality for credit professionals. Although cash flow issues are the primary cause of payment delays, sometimes the fault lies with internal inefficiencies on the servicing company’s end. Distinguishing between the two causes can help determine who is responsible for the delay and how to respond.

For many credit departments, the pursuit of stronger practices and better performance is a constant and ongoing effort. As economic and market trends fluctuate, the need for improvement only grows. Through benchmarking—comparing business processes and performance metrics to industry bests and best practices—credit teams are better positioned to achieve refinement.

Metrics are a key part of how credit managers track their company’s performance, from how many customers are paying late to the number of new credit applications. There is a lot of internal data to consider when working in credit, but how often do credit professionals look outside their own metrics?

Benchmarking has long been a part of the credit management playbook. Tracking key performance indicators (KPIs) like days sales outstanding (DSO), bad debt to sales or average days delinquent (ADD) is standard practice in many credit departments.

Performance metrics are used to assess and enhance efficiency, productivity and success in organizations or projects. But they can also measure customer performance, assess risk and rank customers.