Essential Metrics to Measure Accounts Receivable Health
John G. Salek, President, Revenue Management Associates, LLC
Revenue Management Associates (RMA) helps companies optimize their use of trade credit to increase revenue and margin, control exposure to bad debt, improve cash flow, and reduce operational cost
- 30 years experience in Invoice to Cash solutions development working in a broad range of industries with over 250 clients
- Author of Accounts Receivable Management Best Practices published by John Wiley
- B. S. Business Administration from the University of Connecticut, MBA in Finance from The Tuck School of Business at Dartmouth College.
Every ERP system has its “canned” reports for AR status and results, as well as fairly sophisticated query capabilities to enable analyses of operational throughput and results. However, do these formats and analyses serve your informational needs given that your customer base/segments, products/services, market posture, policy, process, and IT capability are unique? Probably not.
However, you can specify the metrics you need and prioritize them for activation. This webinar will equip you with the knowledge to properly prioritize which metrics you need to best serve your individual organization’s needs. With the proper metrics, you will be better informed to monitor the management of this large asset. With the right analytics, you will be able to pinpoint opportunities to improve the customer experience, improve margins, cash flow, and reduce cost.
- The Essential KPI’s
- Efficiency KPI’s
- Operational KPI’s
- Conclusion and Questions
Course Level - Intermediate
Who Should Attend
- Members of the Finance community responsible at some level, for managing a firm’s AR assets (CFO’s, Controllers, Treasurers, Credit Directors/Managers)
- Customer-facing staff: Sales and Customer Service Managers and Supervisors.
Why Should You Attend
Do you currently understand the nature, risk profile, collectability, and other key characteristics of your Accounts Receivable (AR) asset? How about the cost to manage it and the interest cost of excess, past due to AR?
There are dozens of metrics applicable to the AR asset, but which are the essential ones? By establishing measurement of the essential metrics, you will have visibility to the key metrics which reflect and drive income statement and balance sheet results. Afterward, measurement of supporting metrics can be implemented subject to budget and IT constraints. Finally, the “right” analytics will provide insight into key upstream (order fulfillment) and downstream (AR management) processes to identify opportunities for improvement.
Don’t settle for what your ERP provider thinks are the key metrics. Identify the ones that you need to manage your AR asset and related processes in your organization.
Metrics are essential to measuring the efficacy of managing the Accounts Receivable asset, (which is often among the three largest assets of a company) and the related processes. However, compiling the metrics can be an expensive and difficult (due to IT priorities) endeavor, thereby increasing the importance of prioritizing the measurement of the “right” metrics.