In collections, your biggest cost is manpower. It’s literally 80% of your overhead. So if you are going to be successful in
collections, you need to keep an eye on how that manpower is used. Often in our industry, we’ll talk about FTE
(Full Time Equivalent), which is one person.
So if you generate $7000 with one collector, that’s $7000 per FTE,
right?
But what about the administrative staff, or back office
personnel that keep things running? If a
client has a lot of administrative tasks, that 1.0 FTE collector could really be
1.2 FTE for the collector and their share of the administrative staff … and now
that $7000 per FTE is $5833.
If you are a small agency, and have a limited number of
clients, revenue per FTE is easy to manage and measure – you only have a handful
of clients and staff, but what if you are a multi-branch agency with thousands
of clients? How do you know how much
manpower is actually being spent, by other people taking inbound calls, and so
on?
And what do you do if a client has a wide range of dollar
balances? Liquidation rates might look
great because the high balance accounts were collected, but the low balance
files were ignored? You should look at liquidation by dollar values, but you should also look at it by file count to get a true picture of how you are managing your inventory of accounts.
Below is a sample project report one of our team runs as the
project manager for this group of clients for one industry group every week,
and shares it with the entire company. It's 1 of 22 project reports we see every week.
You can see below for this portfolio we’ve budgeted 2.0 FTE, but we’re over that in actual
manpower – our report measures the actual work done on this client’s accounts,
which would include outbound and inbound calls, payments posted, calls to and
from the client, and so on, which is 4.01 FTE split across 11 different staff
members across 6 branch offices … being over 200% of manpower budget for people working this program is a bit of a concern (because we're probably borrowing people from other programs), but it isn’t a big issue here because we still have a small backlog of files, and our
revenue per FTE, including the administrative team, is $6710, which is decent
for this industry.
(This does not include automated processes, such as self curing accounts from SMS or emails, or our AI voice bot, but that's okay -- that's where we can improve efficiency per FTE).
You can also see our liquidation by file count is excellent,
recovering 34% and trending to over 35%.
Lastly, you can see a backlog of email notices, SMS notices,
and files to be assigned to a collector are not terrible – we’re about a week
behind on assignments. That’s actually a
good thing, you don’t want your team to ‘run dry’ and not have new files to take,
but you don’t want files sitting unworked for more than a week or so.
With these controls we can keep an eye on whether a program
needs more manpower needed to add to it, whether liquidation continues to climb
or is stagnating or falling, and whether all the files are getting the
attention they deserve.
It’s all about keeping your eye on the big picture, and
using real statistics to see if something is succeeding for both the agency and
the client. And you can always share
this with the client and be transparent about the manpower that operates behind
the scenes to bring them their $117,000 remit – crazy thought, eh?
If you ever want to chat process, productivity, or how to
balance operations and administration manpower, drop me a line at blair@receivableaccounts.com
PROJECT REPORT FOR [CLIENT]
============================
* PROJECT MANAGER: CF1
* PROJECT TEAM BUDGET: CF1 (0.5), SR4 (0.25), IS1
(0.5), AG1 (0.25), PA1 (0.5) = 2 FTE
* PROJECT TEAM ACTUAL: PA1 (0.38, DLY 82.00), DJ1
(0.04, DLY 135.80), CF1 (0.4, DLY 61.70), CA3 (0.07, DLY 117.50), JP3 (0.05,
DLY 173.85), SR4 (0.46, DLY 142.35), AG1 (0.64, DLY 96.50), DR4 (0.08, DLY
82.65), IS1 (0.66, DLY 84.65), MK7 (0.63, DLY 100.90), PI2 (0.58, DLY 62.85),
OTHER TEAM MEMBERS (0.02) = EFFECTIVE FTE: 4.01
* ADMIN TEAM ACTUAL: CF1 (0.21), MK5 (0.02) = ADMIN
FTE 0.23
* DAYS IN MONTH: 19
* WORKING DAYS MTD: 20
* MTD RECOVERIES: $117528.47
* MTD REVENUE: $27031.55
* REVENUE PER FTE: $6710.77
* LIQUIDATION (22433 PAID FILES / 64742 TOTAL FILES):
34.64%
* PROJECTED LIQUIDATION (22828 PAID & PRP FILES /
64742 TOTAL FILES): 35.25%
* ELB BACKLOG / SENT LAST 7 DAYS: 5256 / 1403
* SMS BACKLOG / SENT LAST 7 DAYS: 2249 / 465
* BACKLOG # FILES (SCORE >400, MIN BAL $100.00) (21
QC FILES): 84
Blair DeMarco-Wettlaufer
KINGSTON Data & Credit
Cambridge, ON
226-946-1730
blair@receivableaccounts.com
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