Businesses involved with debt collections need to measure and report specific collections goals. That seems obvious, but many companies still don’t follow collections best practices when it comes to forming goals and measuring success.
When you set clear goals and measure the right metrics, it’s easier to identify and solve challenges, improve processes over time and maximize efficiencies.
There are eight steps you can take to better measure your collections performance. Implementing them will help you improve your collections department’s success rates, and as a result, your company’s bottom-line.
1. Determine Your Goals Before You Measure
Every organization should have an in-depth understanding of their goals and what they’re measuring.
To do that, you must define what success means to your organization. Be aware: it can mean something different for every company. Some might set revenue goals. Others might want to improve operational outcomes by a certain percentage. And some may want to simply hit project completion goals like implementing risk scoring technology or installing a document management system.
Consider some of the following examples of collections goals:
- Improve kept promise ratios by 10%.
- Improve self-cure rates by 5%.
- Grow collections revenue by $10,000 per quarter.
- Collect 4% more per account or portfolio.
- Collect 4% more per collector employed.
- Improve collector productivity by 5%.
- Reduce time it takes from initial delinquency to settlement.