{"id":69364,"date":"2024-01-29T08:30:38","date_gmt":"2024-01-29T07:30:38","guid":{"rendered":"https:\/\/www.cashontime.com\/en\/?p=69364"},"modified":"2025-04-28T08:15:59","modified_gmt":"2025-04-28T07:15:59","slug":"collection-receivables-kpi","status":"publish","type":"post","link":"https:\/\/www.cashontime.com\/en\/articles\/collection-receivables-kpi\/","title":{"rendered":"Debt collection and receivables management: essential KPIs"},"content":{"rendered":"\n\n\n\n\n\n
What is debt collection?<\/td>\nDebt collection is a set of steps taken by a creditor to obtain payment of an unpaid invoice from the debtor.<\/td>\n<\/tr>\n
Why manage your receivables?<\/td>\nGood management of your company\u2019s receivables is essential for good financial management, especially cash flow.<\/td>\n<\/tr>\n
What recovery techniques are available?<\/td>\nThere are two main types of collection techniques: amicable collection and judicial collection.<\/td>\n<\/tr>\n
Which receivables are eligible for collection?<\/td>\nTo initiate collection proceedings, the debt must be certain, liquid and due.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Debt collection<\/a> plays a key role in a company\u2019s financial management. Effective receivables management is vital to financial stability, and particularly to cash flow management<\/strong>. To achieve this, it is essential to monitor the performance of your collection strategy. KPI analysis is an essential step in receivables management. That\u2019s why we invite you to discover which indicators are essential for monitoring<\/strong> debt collection, as well as the tools and best practices to adopt.<\/p>\n

DISCOVER CASHONTIME<\/a><\/p>\n

The fundamentals of debt collection<\/h2>\n

Before looking in detail at the key indicators you need to follow to collect your company\u2019s receivables, it\u2019s essential to keep in mind all the steps involved in the collection process<\/strong>. Here\u2019s what you need to know:<\/p>\n

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  1. identify overdue invoices;<\/li>\n
  2. carry out the first customer reminder, whether by telephone, e-mail or letter;<\/li>\n
  3. sending your customer a formal notice by registered mail with acknowledgement of receipt;<\/li>\n
  4. the decision to refer the case to legal collection if the customer fails to respond;<\/li>\n
  5. initiate legal debt collection proceedings, depending on the situation (injunction to pay, small claims collection, provisional injunction, etc.).<\/li>\n<\/ol>\n

    It\u2019s essential to follow all these steps to optimize debt collection. Unpaid customer invoices have a direct impact on a company\u2019s cash flow<\/strong>, since the expected cash inflows are not realized. This in turn can lead to cash shortfalls, which in turn can lead to cash shortfalls, which in turn can lead to suspension of payments.<\/p>\n

    \"performance<\/p>\n

    What\u2019s more, it\u2019s very important to have a good collection process to avoid any risk of a debt becoming time-barred<\/strong>. This would prevent the company from taking legal action against the debtor on the grounds that the debt has been legally extinguished.<\/p>\n

    Last but not least, having an efficient, well-constructed collection process helps to preserve the commercial relationship with customers<\/strong>, even in the event of difficulties.<\/p>\n

    In view of these factors, receivables management is a must for any company. It needs to be able to assess the performance of its collection processes<\/strong>, identify strengths and weaknesses, and take corrective action where necessary. To carry out this analysis, it is essential to refer to certain KPIs.<\/p>\n

    Key KPIs for debt collection<\/h2>\n

    The main indicators to be monitored to assess good accounts receivable management are :<\/p>\n