We have an accounts receivable and collections specialist in our finance department, but we struggle to track their weekly performance beyond lagging collection totals. What activity-based leading indicators should we put on their scorecard to accelerate our cash flow before it impacts our working capital?

Question

Tyler Smith · Accepted Answer

An accounts receivable and collections seat is critical for maintaining cash flow and maximizing valuation during a Step by Step Exit. If you only track total cash collected, you are looking in the rearview mirror. By the time that number drops, you already have a cash flow crisis. You must track the weekly activity-based metrics that prevent invoices from going past due in the first place.

To build an effective scorecard for this back-office seat, focus on proactive and operational milestones.

First, track the billing cycle time. This is the average number of days between completing a service or shipping a product and sending the actual invoice.

Second, track the percentage of invoices sent with perfect data. Incorrect invoices are the primary reason clients delay payment.

Third, track weekly outbound collection touchpoints. This is the absolute number of personal emails or phone calls made to clients with balances approaching thirty days past due, not sixty or ninety days.

Finally, track dispute resolution time. Measure the number of hours it takes to resolve billing discrepancies once a client flags them.

When your collections specialist owns these leading metrics, they actively compress your cash conversion cycle. This keeps your working capital healthy, minimizes bad debt, and proves to prospective buyers that your administrative back-office is highly systematic.