The corporate collection function is under more pressure than ever to deliver results, and our survey shows credit and collection pros are more than meeting the challenge. Seventy-eight percent of our sample reported meeting or exceeding their collection goals, and just 4 percent fell far short. Large firms exceeded the average and, somewhat surprisingly, small firms also did well.

The following table provides a breakdown of the key demographics for this sample. We have provided both the average and median for each data point because the averages where strongly skewed upward by a small group of very large enterprises.

Survey Sample Demographics
Survey Sample Demographics	Annual Revenue (millions $)	Receivables Balance (millions of $)	Percent AR Current	Number of Customers	Total Credit Dept. Staff	Total FTE Collectors
Average	1,095.3	105.4	79.4%	9587	9.6	5.6
Median	207.0	17	82%	1300	4	3

Most credit departments (nearly half) determine collection coverage based on sales territory, distribution channel or geography (for future reference we will call this "regional coverage"). One advantage of a regional coverage scheme is that collections are generally aligned with sales. Only 13 percent reported dividing collection coverage alphabetically, a scheme which offers little strategic or tactical benefits. The remaining 41 percent of our respondents base their collection assignments on account type (customer characteristics such as industry, risk or size) or collection stage (over 30 days, 60 days, etc.) or some combination of the two. It is interesting to note that no respondent claiming to use one of these collection coverage schemes, all of which require a higher level of sophistication than alphabetical or sales/geographical coverages, reported falling far short of their collection goals.

In fact, when we examine the relationship between coverage scheme and collection performance, these same three sophisticated account assignment methodologies all fall fairly close to the 78 percent success norm. Furthermore, the alphabetical scheme fell well below the norm. Interestingly this was not for a lack of firms exceeding goals, but instead of too few meeting their targets--apparently something of an all-or-nothing situation.

Collection Automation Tools Provided to Collectors
Examining whether automation was a factor in the performance of each coverage scheme, we found that firms assigning coverage by region and customer type showed the most automation and those using collection stage the least. The survey showed that you don't need to have an expensive, automated collection program to have a sophisticated collection strategy, though it helps. Since the collection stage segment had fairly strong collection performance, we can surmise that it is a very effective approach, whether or not automation is involved.

The top four automation tools, all used by more than 50 percent of the survey sample, are no surprise. Automated desktop emailing and faxing, consolidated customer information, invoice-level notes and the ability to relate multiple accounts to each other are not only found in collection software, but are also showing up in more and more ERP or financial software receivables modules. The remaining items on the list are more likely to be found only in a collection software solution or to be something developed in-house.

|image4| Interestingly, the two tools that were the least frequent in our sample (i.e., automated dunning and strategic workflow) are key productivity elements found in collection software solutions. It also bears note that 13 percent of our sample reports do not have access to any of these automation tools, which is consistent with our previous question regarding the respondent's degree of automation.

Over 80 percent of respondents measure performance by reviewing the aging for each collector's AR portfolio. Over 50 percent also look at DSO. Other collector outputs--cash receipts, CEI and promised payments made and kept--are considerably less popular. Looking at promised payments is a relatively new metric that requires the technology both to record and then to track promises, so it will be interesting to see if it gains in popularity.

Contact made is a measure of collector input, and is used by roughly a third of the survey respondents, again requiring additional technology to be easily tracked. All in all, there remains a lot of room for more effective measures of individual collector performance.

Collection Contacts
Category	Average
Minimum expectation of contacts to be made	29
Optimal number of contacts by top performers	49