Collections Revenue per Account

Collections Revenue per Account

KPI Details

Collections Revenue per Account measures the total revenue generated (amount collected minus amount paid back to original creditor) by the Collections function in relation to the number of delinquent accounts managed 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 contract 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 total revenue generated (amount collected minus amount paid back to original creditor) by the Collections function divided by the number of delinquent accounts managed over the same period of time.

KPI Best Practices

• Onboard new high-dollar accounts with a percentage-based commission structure
• Report payment of outstanding debts to credit bureaus as quickly as possible to incentivize payment of debts
• Set targets and provide incentives/rewards for agents who meet their collections goals

KPI Calculation Instructions Collections Revenue per Account?

Two numbers are used to calculate this KPI: (1) the total revenue generated by the Collections function, and (2) the number of delinquent accounts managed over the same period of time. Subtract the amount paid back to the original creditor from the amount collected to calculate how much revenue is generated by the Collections function. 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 :

Total Collections Revenue Generated / Number of Delinquent Accounts Managed