Benchmarking

This tool links important credit and A/R management, workload, transaction and cost data. 

The Credit Research Foundation can provide:

  1. Anonymity – As a third party organization, CRF’s interest is to offer an opportunity for companies to exchange information, benchmark with each other on performance issues and, at the same time, ensure the confidentiality of data.
  2. INDUSTRY GROUP BENCHMARKING – If you are a member of an industry credit group, CRF can perform a specific benchmarking project for your group. This unique project will open the door to discussion of “best practices” within your group.

Benchmarking Report Outputs:

Metrics calculated are as follows:

I. FINANCIAL PERFORMANCE METRICS
DSO
Best Possible DSO
Average Days Delinquent
Collection Effectiveness Index
Percent Current
Percent AR Greater Than 60 Days
Percent AR Greater Than 180 Days
Gross Bad Debt as % of Sales
Bad Debt Recovery as % of Sales
Net Bad Debt as % of Sales
Deductions as % of AR $
Deductions as % of AR items

II. CUSTOMER METRICS
Top 10 Customers as % of Sales
Top 20 Customers as % of Sales
Invoice Size
Number of Invoices Per Customer
Number of Active Customers
Primary Customer Type

III. DEDUCTION METRICS
Number of Deductions Processed Per Deduction Processing Employee
Deduction Processing Costs as % of Sales
Deduction Turnover
Deductions Salary Per Deductions Employee
Deductions as % of Sales
Deduction Balances Included in AR Portfolio

IV. EFFICIENCY METRICS
Various costs per transaction, employee, salary for Credit/Risk, Cash Application, Collections, etc.

V. OUTSOURCING METRICS
Percent of Workload that is Outsourced for Credit Risk, Cash Application, Collections, Deduction Processing, etc.

VI. COST ANALYSIS METRICS
Collection expenses
Outside Services
Outsourcing
Travel
Occupancy or Rent
IT Systems
Depreciation/Amortization
Total Cost as % of Sales, % of FTE Salary Benefits, Per Customer and Per Employee

VII. BUSINESS PRACTICES METRICS
% of Companies Charging Late Payment Fee
% of Companies that Accept Credit Cards
% of Companies Allowing Anticipation Payment Discount
% of Late Payment Charges Ultimately Collected
Annual $ of Credit Card Sales as % of Sales
Electronic Invoicing
Electronic Payments
Auto Write-off
Use of Auto-cash Systems including Auto-cash Hit Rates
$ Amount Shipped Automatically to New Customers with No Credit Investigation
% of Customers in Highest (Top Third) Risk Category

VIII. ORGANIZATIONAL STRUCTURE / RESPONSIBILITIES
Reporting Relationships
Where Various Functions are Primarily Performed within the Organization
Department Responsibilities

IX. SYSTEMS INFORMATION
AR or ERP Systems Used
Use of Bolt-on Deduction Management, Collection Management Systems and Credit Scoring Systems

Questions about our benchmarking?

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