What's in your monthly/weekly CM report?

Traditional management reporting revolves around aged debtors, generalised DSO (with all its failings); past due percentages and values, bad debt provision, legal actions, stop lists or held orders and disputed balances.

To really open eyes and encourage greater awareness, credit management must enhance the use of information afforded it by almost any ERP or supplementary software systems. The general reporting as described in the first paragraph is generally deemed to be negative. A staid and unwarranted picture is therefore almost instantly created, one of “protector” or “warden” of company assets alone, lacking in commercial acumen or direct contribution to business growth.

Management of cash and working capital ratios of course is extremely relevant and a core responsibility, this will never be different but it should not in itself prevent credit management from having more influence in aspects of business review and development. Engaging new ways of looking at information either already provided in the traditional way or encompassing fresh data to stimulate awareness is vital moving forward. It is also vital that any type of reporting includes current and historical data covering at least 6 months as this is crucial to overall review and movement.

Modern ERP system provide enormous scope to tailor any report produced whether by territory, sales grouping, account manager, client type, collector or indeed product type

Expanding reporting – (suggested)

·         Segmented A/R ageing (top 10, 20, 50 or 100)

·         Standard DSO, current DSO and past due DSO

·         Visible calculators (ergo current and prior months data including monthly sales

·         Active number of trading accounts

·         Open cash items

·         Active credit balances

·         Average debt value

·         Credit line banding's

·         % of orders released in month

·         Number of invoices and credit notes issued with average values

·         Cash with order volumes

·         Top 20 accounts by balance

·         Average gross margin (by segmentation)

·         Relevant 90+ debt with comment and action plan

·         Top 10 aged 60+ values

·         Aged debt by sales groups or collectors

·         Cash target for the following month

·         Percentage of total debt collected against target

·         % by day of overall collection

·         Breakdown of receipts (by type of payment)

·         Legal actions and insolvencies in the month

·         Insured/uninsured risk across A/R – (full or summarised)

·         Risk profile/traffic light reports

·         New accounts set up and credit value created

·         New business billed against prior month new credit created

·         Value of credit available against debt value evident (segmented if required)

·         Accounts with credit lines dormant for more than 4 months

·         Unused credit list – (preferably showing YTD and CUM sales and more critically, account manager or sales group)

·         Excess of credit line report – with comment and approvals

·         Total credit line availability (less new credit)

·         Client visits

·         Training

·         Workflow and response timing

·         Industry sector overview

·         New credit accreditations or qualifications achieved

·         Sales finance training

·         Summary report, observation, forecast and conclusion

Dull, repetitive all lengthy reports will rarely be read more than once.Negative data ensures credit remains the ‘black sheep’ of corporate composition – a back office function

Well constructed, informative and timely reports that offer wider fields of view will be more attractive and result in positive feedback. They will be sought by other senior Directors too.

Credit will be seen as an important business development and business analytical function in addition to cash and risk management; a valued contributor to business growth and profitability.