Measurements “ Measure it, report it and your results will improve” Michael Puccinelli, CCE
Agenda <ul><li>What makes a measure meaningful? </li></ul><ul><li>Benchmarking makes performance measures valuable </li></...
Performance measures- effectiveness measures <ul><ul><li>DSO </li></ul></ul><ul><ul><li>Best possible DSO </li></ul></ul><...
Operational Measures efficiency measures <ul><ul><li>Active customer accounts per credit and collection employee </li></ul...
Quality measures <ul><ul><li>Bad Debt to Sales </li></ul></ul><ul><ul><li>Ratio of approved new accounts to total new appl...
Timeliness measures <ul><ul><li>Average time to perform a credit review compared to your SLA </li></ul></ul><ul><ul><li>Av...
Yield Measures <ul><ul><li>Deductions as a percent of total AR </li></ul></ul><ul><ul><li>Deductions as a percent of sales...
<ul><li>Q&A </li></ul>
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CMA - Credit Department Success Measurements

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CMA - Credit Department Success Measurements

  1. 1. Measurements “ Measure it, report it and your results will improve” Michael Puccinelli, CCE
  2. 2. Agenda <ul><li>What makes a measure meaningful? </li></ul><ul><li>Benchmarking makes performance measures valuable </li></ul><ul><li>What is the “Right” measure </li></ul><ul><ul><li>What does the measure express? </li></ul></ul><ul><ul><li>What do the results of the measure indicate? </li></ul></ul><ul><ul><li>Does the measure support your objectives? </li></ul></ul><ul><ul><li>Is the measure valid? </li></ul></ul><ul><ul><li>Does the measure’s results comply with your organizational goals and values? </li></ul></ul><ul><li>Using appropriate measures of performance can help you manage your business </li></ul><ul><li>Performance measures </li></ul><ul><ul><li>Effectiveness measures </li></ul></ul><ul><li>Operational Measures </li></ul><ul><ul><li>Efficiency measures </li></ul></ul><ul><li>Quality measures </li></ul><ul><li>Timeliness measures </li></ul><ul><li>Yield measures </li></ul>
  3. 3. Performance measures- effectiveness measures <ul><ul><li>DSO </li></ul></ul><ul><ul><li>Best possible DSO </li></ul></ul><ul><ul><li>Average days delinquent (ADD) </li></ul></ul><ul><ul><li>Sales weighted DSO </li></ul></ul><ul><ul><li>Prior Month’s past due collected </li></ul></ul><ul><ul><li>Percent over 60 days – or percent of any age category </li></ul></ul><ul><ul><li>Bad Debt Recoveries as a percent of Bad Debt </li></ul></ul>
  4. 4. Operational Measures efficiency measures <ul><ul><li>Active customer accounts per credit and collection employee </li></ul></ul><ul><ul><li>Active number of accounts per collector </li></ul></ul><ul><ul><li>Operating cost per employee </li></ul></ul><ul><ul><li>Cost per sales dollar </li></ul></ul><ul><ul><li>Cost of collections </li></ul></ul><ul><ul><li>High risk accounts </li></ul></ul><ul><ul><li>Check turnover per cash applicator </li></ul></ul>
  5. 5. Quality measures <ul><ul><li>Bad Debt to Sales </li></ul></ul><ul><ul><li>Ratio of approved new accounts to total new applications </li></ul></ul><ul><ul><li>Percent of orders held for credit reasons to total orders </li></ul></ul>
  6. 6. Timeliness measures <ul><ul><li>Average time to perform a credit review compared to your SLA </li></ul></ul><ul><ul><li>Average time to resolve a customer deduction compared to your SLA </li></ul></ul><ul><ul><li>Average time to refund duplicate or over payments compared to your SLA </li></ul></ul>
  7. 7. Yield Measures <ul><ul><li>Deductions as a percent of total AR </li></ul></ul><ul><ul><li>Deductions as a percent of sales </li></ul></ul><ul><ul><li>Deductions as a percent of customer transactions </li></ul></ul>
  8. 8. <ul><li>Q&A </li></ul>

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