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When clients engage smartAR they are typically looking to improve their cash flow and/or standardise their accounts receivable processes.

Our brand promise is we help guide firms to do exactly that. Accordingly, we are always keen to understand how a client would know if we are delivering on our promise.

What always surprises us is the difference between our client’s “thinking” and “feeling” responses.

For example, most accounting firms mention “reduced debtor days” as a measure.  That’s one of three or four metrics that when tracked will reveal improving AR systems, processes and ultimately results.

And yet, when we do video testimonials, clients never mention it.  It’s always the emotional improvements that shine through. Here are a few recent examples:

“The account managers have less stress now they don’t have to chase slow payers”

“The partners are happier they can actually make payments to themselves”

“Our team is more focused on more productive matters, now we are getting fewer inbound calls querying invoices”

When we started smartAR our entire focus was on improving the Debtor Days KPI and increasing the amount of cash available to a business. Debtor days is still the classic measure of accounts receivable performance. We love seeing Debtor Days come down.

Now though, we tend to probe a little further with our clients, e.g. “If debtors paid a little faster what would that increase in cash flow mean to your firm?”

When our clients focus on the outcome (or objective), rather than the metric, it helps them develop Objectives & Key Results (OKR’s) to truly measure success.

It took us a while to disconnect KPI metrics (e.g. Debtor Days) from outcomes.  What about your firm?

Do you have a KPI of, say less than X$ or Y% owing over 90 days? However, owners are still short of cash to pay-out dividends, or staff are still wasting hours resending unpaid invoices.

How would you measure an improvement in Accounts Receivable?