Reporting best practices for collection & recovery teams
Performance indicators are vital in providing perspective on the current state of business operations and offer valuable insight for future strategies. For collection and recovery teams, these key performance indicators (KPIs) are vital not only in highlighting where improvement is needed, but in what needs to be done to better guide consumers through their distressed debt and payment management.
What are the best KPIs for collections & recovery teams?
Days sales outstanding (DSO) – DSO is the average number of days it takes a business to collect payment; a high DSO highlights a problem with receiving payments whereas a low DSO shows a positive conversion cycle and collection performance. DSO offers a good understanding of daily performance.
Collective effective index (CEI) – Like DSO, CEI is another measurement of collections performance, but produces a more precise and reliable result. It measures the amount of collections received in a certain period of time against those that were available. The higher the CEI, the better the collection performance. Much like DSO, CEI is necessary in providing performance perspective, but in a more precise format.
Right party contacts (RPC) – RPC is a performance indicator of the number of times a collections & recovery team is able to successfully contact a consumer instead of an answering machine, recorded message or wrong person. This is a crucial KPI, as reliable contact to consumers is pivotal in increasing collection and recovery performance. A low RPC reduces the ability to interact with customers and guide them through their financial situation, especially in omni-channel environments.
Profit per account (PPA) – PPA is the gross measurement of profit in relation to the accounts of consumers that owe payment. As a KPI, PPA highlights the cost tied to managing each account and offers a clear measurement to the accounts requiring attention. This helps to maintain high value accounts while effectively managing those that need more help.
How can software enhance these practices?
Much of the data involved with collection and recovery KPIs is traditionally separated or departmentalized across business systems. Whether it’s another department or simply stored in a separate device, retrieving this data to perform analysis can result in inaccuracies, inconsistencies or misinterpretations with each additional step.
By centralizing collection and recovery data using the right software, the relevant information required to provide reliable KPIs is efficiently found in a single system. Moreover, the input of measurement for each practice is in the same place the data is stored, limiting the number of processes required between the two. Centralized data means KPIs are more trustworthy and timely, and doesn’t require a business wide information hunt for routine updating.
Automated metrics and analysis
It’s no secret that KPIs depend upon the reliability of recorded data to present actionable results. Without an effective measuring and analysis system, inaccuracies and inconsistencies can arise, resulting in faulty decisioning and outcomes, as well as poor collection and recovery performance.
The right collections and recovery software solves this issue by automating the recording of data and metrics in real-time. As collections take place, they’re both recorded and analyzed. This removes the need for dedicated workers to fill the role. Not only that, but the software can highlight contextual trends through data analysis, providing strategies that improve the customer experience, with significant, positive influence for future customers.
Enhancing your collection/recovery operations with C&R
KPIs and performance measurements are vital in creating accurate account, diagnostic and daily reports. When done right, collections and recovery teams have reliable and actionable data that helps to maximize their ability to help customers. Software can be used to boost the effectiveness, reliability and accuracy of these measures to directly benefit both customers and business teams.
At C&R, our simple-to-use, industry leading Debt Manager platform acts as a central orchestrator for an entire collections operation. We provide you with extensive configurability and quick and easy integration that records KPIs at each and every step, bringing simplicity to innovation. By automating analysis and centralizing data, Debt Manager can provide you with reliable and sufficient data to improve your collection and recovery performance.
Looking to improve the reliability of your own KPIs? Contact us today to learn how we can help you build a more tailored experience for your customers’ individual needs.