ERP Consultant Blog

Accounts Receivable Management KPIs

Written by Staff Author | Fri, Feb 26, 2021

Increase Cash Flow with Accounts Receivable Management KPIs

Modern CFOs understand the importance of employing technology wherever possible to gain efficiencies and increase productivity and profits. Any effort to get increase accounts receivable collection productivity is welcome if it helps increase cash flow. Key Performance Indicators (KPIs) are important for accounts receivable management to monitor collection performance and respond to collection issues. Accounts receivable management KPIs provide you with the data you need to manage the cash flow with fewer surprises. 

3 Steps to Get Started with Accounts Receivable KPIs

Most ERP systems do not offer optimal collections functionality. Managing KPIs manually is difficult with all the data points to capture and track over time. Spreadsheets are not equipped to track the information, documents, correspondence, and workflow processes. It is nearly impossible to measure progress and make decisions by manually tracking KPIs.

Our upcoming blogs will review 3 steps to start measuring smart KPIs with the right strategy, metrics, and automation tools.

Step 1 - How to Build an Accounts Receivable KPIs Strategy
Step 2 - What Accounts Receivable KPIs Metrics to Measure
Step 3 - Why Implement Accounts Receivable KPIs Automation

Establishing an A/R and collections strategy with standards and practices before setting up metrics and procedures will help ensure your organization gets paid faster, does not miss details, minimizes angst among customers and employees, and maximizes revenue. Your cash flow will improve once sales, credit, and collections can easily check the status of accounts, invoices, and related collections communications. In our experience, customers that implement A/R software realize the ROI (return on investment) in 2 to 3 months: 

  • Reduce DSO (days sales outstanding) by 25%
  • Reduce bad debt by 20%
  • Increase collections efficiency by 30%
  • Increase cash flow by 22%