Average Collections Payment Size

Average Collections Payment Size

KPI Details

Average Collections Payment Size measures the dollar amount collected by the Collections function in relation to the total number of collections made (i.e., the quantity of payments made) over the same period of time. Low values for this metric can be indicative of inefficient call scripts and call handling policies, an increase in payment disputes (can be due to product or service errors, customer dissatisfaction or undelivered products or services), and sub-par collections employee training and performance. Excessively low values for this metric can expose the company to financial risks (e.g., fines, legal actions, bankruptcy, etc.) by preventing on-time payment of liabilities.

KPI Definition

The dollar amount collected by the Collections function divided by the total number of collections made (i.e., the quantity of payments made) over the same period of time.

KPI Calculation Instructions Average Collections Payment Size?

Two variables are used to calculate this KPI: (1) the dollar amount collected by the Collections function, and (2) the total number of collections made (i.e., the quantity of payments made) over the same period of time. Include accounts at all stages of collections (i.e., early to late stage) in this calculation. Early stage accounts in collections are considered to be accounts that are 30 - 90 days overdue. Late stage accounts in collections are considered to be accounts that are 120+ days overdue.

KPI Formula :

Dollar Amount Collected by Collections / Total Number of Collections Made