Accounts Receivable Management, like many other lean industries, has had a long-standing need to minimize headcount and other overhead expenses, while also delivering performance and high levels of service for customers. How have we done it? Like so many others, we partner with vendors, such as collection agencies, to get the job done. But changes in the way companies oversee and partner with vendors has become more costly and complex.  

Scorecards have been a versatile tool to help decision makers oversee collection agency performance in both absolute and comparative terms. For a tool in such widespread use, however, there is surprisingly little uniformity or standardization. This is not a "dig" so much as a rallying cry for something we all need.

As scorecards stand today, are they doing the job(s) we need them to do? Or instead, have they become yet another data stream that goes into the wind without informing any meaningful business decisions? To be sure, scorecards shouldn’t just be something we complete each month or quarter simply out of habit, to be able to check a box. They should be designed and weighted in such a way that they drive improved performance and accurately influence business decisions about the client-vendor partnership.

A brief history of vendor scorecards

Pre 2009(ish), agency management scorecards (if they even formally existed) were centered on driving performance. Agency managers had a great deal of autonomy to independently onboard new agencies, increase and decrease agency volume, and hire and eliminate agencies as they saw fit. Scorecards were a way to take formal measurement of things like “paid to productive time,” “right party contacts,” “promises to pay,” “check by phone volumes/conversion,” among others.

Post 2009, regulatory changes drove sweeping redesign and ushered in an overlay that formalized the measurement of risk, compliance and control. Scorecards became a must-have, with a new job to standardize “performing” and to consistently measure against that definition. What constituted performing broadened to include how well agencies were able to comply with rules such as verbal and written disclosures, call times, max call attempts, and more. Onsite visits became standardized, more frequent and more extensive.

Today’s scorecard

The modern vendor scorecard has has added a critically important third layer -- a focus on the customer experience. While this has always been one element of performance, most industries have discovered why it’s important for the customer experience to carry much more weight than it did before.

So here we are. As an industry, our scorecards now attempt to measure everything: collections effectiveness, efficiency, compliance and the customer experience. Has this empowered us to make better decisions? As we move toward collecting more and more data, do we have a plan for what we’ll do with that information?

The future of scorecards

The scorecard is overdue for a double-check. It’s always worth re-evaluating what can be lightened or shifted on the scorecard, without compromising oversight in any one category. Are we over or under investing in call monitoring? Do we do too many or too few onsite visits? Is the weighting on the scorecard balanced enough to drive the desired performance, but not spread across so many metrics that it’s watered down? What’s not being measured on scorecards that the business landscape ahead of us suggests should be measured?  

The list of criteria warranting revaluation and challenge is long, but the upside to taking on the task is huge.


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