What are Collections Analytics

The Benefits of Collections Analytics

Advanced collections software, such as A/R invoice-to-cash management platforms, deliver comprehensive collections analytics to their customers.

Benefits include:

Offer insight into bottlenecks and challenges in A/R collections solutions. When A/R data is centralized in a single platform, it becomes easier to analyze and understand trends in customer behavior and find solutions. You may see that customers had difficulty paying via a particular method, or that payment terms were not clearly communicated to customers in a particular region or in their language, resulting in late or unpaid invoices.

Optimize your A/R collections strategy. Once you gain insight into trends and behavior of your customers, you’ll be more confident in developing a strategy for segmenting your dunning workflows. For example, if you learn which customers pose a higher risk of credit to your company, you’ll give them stricter payment terms, while customers with a better payment history will benefit from a larger credit limit.

Motivate and reward A/R collection teams. When A/R managers gain insight into which employees are the most productive, they can decide to reward those employees accordingly. Alternatively, they can motivate those who show signs of potential.

Improve customer relationships. Data collected can be used to customize dunning workflows for different customer types which improves the customers experience. As a result, you’ll start to gain more trust from your customers and successfully build your brand.

The 3 Main Levels of A/R Collections

Ideally, you should be able to manage all of your accounts through a platform that automatically aggregates information about your receivables into one comprehensive dashboard. The dashboard should be customizable, with the ability to add multiple dashboards for different roles within your financial team or organization as a whole. These collections analytics should be available both on a team and individual level, so that you can both measure both A/R performance as a whole and the performance of individual collectors.

Collections analytics should be available at three main levels:

Foundational level. This level includes foundational metrics you and your A/R team need for performance: the number of open and closed invoices, DSO and other relevant metrics.

Complex metrics. These metrics are more comprehensive and include: Median Days Delinquent (MDD), customer risk, payment forecasting and more. All metrics are calculated and displayed automatically.

External live data. This level of collections analytics includes external data relevant to your internal collections data, such as interest and inflation rates.

Get Comprehensive Collections Analytics with Gaviti

Gaviti’s A/R invoice-to-cash management platform delivers comprehensive collections analytics and automatic AI-powered insights to help you optimize your entire A/R flow. For example, your team’s performance can be measured based on each individual collector’s achievements, potential imbalances or effectiveness of the workflow, yet additional insights can offer advice that can help improve performance further and give you a better understanding of how to manage your working capital.

The Collections Analytics dashboard also works together with Gaviti’s other modules such as Cash Application, Credit Management and Monitoring, and Disputes and Deductions Management to ensure that A/R teams have better visibility into the entire A/R lifecycle. For instance, it can connect data from past payment history to automatically extend more credit to a customer, and automatically match invoices to payments for unmatched accuracy in invoice reconciliation. Or it can find patterns in customer data that point to specific customer trends, such as those in a certain region or that ordered a certain product line during a specific time period, that claim disputes.

Want to learn more about how your business can get comprehensive collection analytics and better visibility into your A/R data? Speak to a Specialist to see how Gaviti works.