It is important to understand how credit works in your specific industry and geographical area, otherwise you may be benchmarking your performance against data that just doesn’t make sense. By knowing how your metrics and accounts receivable key performance indicators measure up to others in your industry and location, you can compare your KPIs against averages and use that information to identify your strengths and weaknesses, set more competitive credit terms, and more. But how can you figure out what makes sense for your particular industry or location? Here are a few suggestions and resources to help you get started:
Related Reading: Critical Metrics for Measuring Accounts Receivable Performance
3 Places to Gather Info on Business Credit Management Standards in Your Industry
Trade association or industry trade group can be a great resource for getting grounded in the basics of credit management as it applies to your business. Just look them up online and see what kind of resources they have available to you. You may also want to check out LinkedIn and visit industry groups where you could start a discussion around the topic or credit management in your industry and learn from your peers.
There are other free resources available as well, such as:
Experian Business Information Map: Use this map to see the average risk scores, average days beyond terms, average delinquency rate, and the average bankruptcy rate by industry and by state. Click here to get a closer look.
Cortera Market Trends: Cortera tracks late payments by businesses against agreed upon terms to provide the percentage of late A/R by state and by industry. Click here take a look.
As developers of business credit management software, we too have a wealth of knowledge to share when it comes to credit management best and accounts receivable best practices! Our resource library is full of white papers, templates, tools, and more to help you protect your finances, improve customer relationships, and take the hassle out of collecting invoices. Click here to visit the resource library and get started.