DAL Snapshots

Measuring Receivables Performance with KPIs

The ability to convert AR to cash is the primary job of the Credit Department. The overall performance of the department should be monitored and used to help improve efficiencies of the department and for future considerations. Most companies use Days Sales Outstanding (DSO), however, there are several other Key Performance Indicators (KPI's), that used in conjunction with one another, give a better picture of a company's receivables.

Red Flag warnings

There are several warnings signs to indicate when a debtor will require escalated collection efforts, such as when a debtor has made two broken promises the likelihood of default greatly increases. To be aware of the signs and for a more proactive collection effort, DAL has created Red Flag Warning, Spot the Signs.

Where is your debtor Threshold?

Your debtor’s threshold is that nebulous, collection-cycle timeframe when your
customer actually makes the payment. It may be upon your first call, during execution of judgment, anywhere in between — or never. Do you know the threshold for each of
your customers, and is it documented in a file? Of course, there is no concrete answer.

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