Measurements “ Measure it, report it and your results will improve” Michael Puccinelli, CCE

Agenda What makes a measure meaningful? Benchmarking makes performance measures valuable What is the “Right” measure What does the measure express? What do the results of the measure indicate? Does the measure support your objectives? Is the measure valid? Does the measure’s results comply with your organizational goals and values? Using appropriate measures of performance can help you manage your business Performance measures Effectiveness measures Operational Measures Efficiency measures Quality measures Timeliness measures Yield measures

What makes a measure meaningful?

Benchmarking makes performance measures valuable

What is the “Right” measure

What does the measure express?

What do the results of the measure indicate?

Does the measure support your objectives?

Is the measure valid?

Does the measure’s results comply with your organizational goals and values?

Using appropriate measures of performance can help you manage your business

Performance measures

Effectiveness measures

Operational Measures

Efficiency measures

Quality measures

Timeliness measures

Yield measures

Performance measures- effectiveness measures DSO Best possible DSO Average days delinquent (ADD) Sales weighted DSO Prior Month’s past due collected Percent over 60 days – or percent of any age category Bad Debt Recoveries as a percent of Bad Debt

DSO

Best possible DSO

Average days delinquent (ADD)

Sales weighted DSO

Prior Month’s past due collected

Percent over 60 days – or percent of any age category

Bad Debt Recoveries as a percent of Bad Debt

Operational Measures efficiency measures Active customer accounts per credit and collection employee Active number of accounts per collector Operating cost per employee Cost per sales dollar Cost of collections High risk accounts Check turnover per cash applicator

Active customer accounts per credit and collection employee

Active number of accounts per collector

Operating cost per employee

Cost per sales dollar

Cost of collections

High risk accounts

Check turnover per cash applicator

Quality measures Bad Debt to Sales Ratio of approved new accounts to total new applications Percent of orders held for credit reasons to total orders

Bad Debt to Sales

Ratio of approved new accounts to total new applications

Percent of orders held for credit reasons to total orders

Timeliness measures Average time to perform a credit review compared to your SLA Average time to resolve a customer deduction compared to your SLA Average time to refund duplicate or over payments compared to your SLA

Average time to perform a credit review compared to your SLA

Average time to resolve a customer deduction compared to your SLA

Average time to refund duplicate or over payments compared to your SLA

Yield Measures Deductions as a percent of total AR Deductions as a percent of sales Deductions as a percent of customer transactions

Deductions as a percent of total AR

Deductions as a percent of sales

Deductions as a percent of customer transactions

Q&A

Q&A