With the NFL season officially underway, let’s take a moment to explore what Accounts Receivable departments can learn from coaches, especially when it comes to the season’s biggest game changer: analytics.
As a credit and collections professional, take a look at the metrics you’re currently tracking. Throughout my years as a consultative resource for AR departments, I’ve found that most companies spend most of their time focusing on DSO and maybe how much they wrote off as uncollectible. Don’t get me wrong, tracking how fast you get paid is important. If collecting money was a game, DSO would be the score. But if that’s all you’re measuring, you’re not properly leading your team.
Let’s think about this from the perspective of a football coach. When evaluating a team’s performance, coaches look at many other stats beyond the final score. Tracking things like rushing yards, turnovers, quarterback ratings, third-down efficiency, help identify areas that need to be improved upon as well as potential opportunities. All of these ultimately feed into the final score and the overall success of the season.
Within accounts receivable, we need to go beyond DSO. Tracking underlying metrics allows companies to evaluate individual performance, uncover potential process improvements, gain valuable insights, and of course leads to an improvement in DSO.
If you’re interested in diving deeper to improve your team’s performance but are unsure of what metrics to track, this AR Analytics Playbook can provide some insight on six simple, yet effective metrics that every financial executive should be tracking. By leveraging these metrics, your company is guaranteed to improve customer relations, reduce administrative costs, and get paid faster.
I encourage you to learn more by downloading the AR Analytics Playbook today.
Mark Wilson, a former CFO, is the President of TermSync, a cloud-based accounts receivable software company owned by Esker, Inc.