Collections Revenue as a Percentage of Total Amount Collected

Collections Revenue as a Percentage of Total Amount Collected

KPI Details

Collections Revenue as a Percentage of Total Amount Collected measures the dollar amount of revenue generated (amount collected minus any amount paid back to original creditor) in relation to the total dollar amount collected by the collection agency over the same period of time. A relatively low value for this metric can be indicative of inefficient call scripts and call handling policies, inadequate contracts with the original creditor, poor customer contact tracking and management (i.e., tracking of customer communications and contact information), 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. While companies typically look to streamline their processes to improve their collections practices, renegotiating creditor contracts and purchasing debt at reasonable rates are also important.

KPI Definition

The dollar amount of revenue generated (amount collected minus any amount paid back to original creditor) divided by the total dollar amount collected by the collection agency over the same period of time, as a percentage.

KPI Best Practices

• Effectively negotiate with clients/creditors to retain higher portion of collection amounts as fees
• High collections recovery rates to leverage when negotiating fees for service
• Comprehensive knowledge of market to be able to determine maximum commission rates

KPI Calculation Instructions Collections Revenue as a Percentage of Total Amount Collected?

Two numbers are used to calculate this KPI: (1) the dollar amount of revenue generated, and (2) the total dollar amount collected by the collection agency over the same period of time. Include collections from 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. In this calculation, subtract the amount paid back to the original creditor from the total dollar amount collected to calculate the dollar amount of revenue generated.

KPI Formula :

(Collections Revenue Generated / Total Amount Collected) * 100