Net30Score
The typical Credit & Collections department uses the aging method to prioritize internal collection activity. Those customers, who owe the most money, for the longest period of time, have the highest priority in the collection process. However, if your customers have different risk levels, then shouldn’t you have different strategies to manage and collect from them based on that risk level, rather than just aging and amount owed?
As the largest asset on most company’s balance sheets is its Accounts Receivable (AR), the goal of the Credit & Collections department is to manage this asset through the timely collection of outstanding invoices. These collections ensure ongoing cash flow streams that meet a company’s financial objectives, yet the majority of companies prioritize collections based on aging and amount owed. Using only the aging method often causes the wrong treatment to be given to the wrong customer at the wrong time and for low dollar high risk customer to be ignored.
PredictiveMetrics (PMI) has found that using inherent risk is a better predictor than the aging and amount due method. Our Net30Score , quickly and accurately predicts the likelihood that an existing customer will become severely delinquent, go to loss, or file for bankruptcy within 6 months of the date the customer was scored for collections and 18 months for portfolio management, release of orders, and credit line management.
PMI’s applies advanced statistical technology to develop Net30Score by combining your historical internal performance data, which is proven to be the most predictive data available to you, with your credit and collection policy rules resulting in superior credit risk analysis and a substantial increase in credit and collection department productivity and efficiency. Net30Score leverages the predictiveness of internal performance data, which is proven to be a much more powerful predictor of risk than a model based merely on external bureau data.
Net30Score Outputs
Most credit scoring models assess the risk of a company by delivering a single data variable as an output of the model. Net30Score goes well beyond that by delivering eight (8) data variables each month on each scored customers that helps you determine the inherent risk of the customer, the dollar value of your risk as well as tell you why your customer scored the way it did. Net30Score is typically delivered in a monthly scoring process and the data outputs are available to the users in both granular and report format though our hosted web application ScoreMiner or through a data file delivered through secure Internet FTP transfer.
Net30Score FREE Validation Analysis
To prove to you that PMI’s Net30Score can provide a better analysis of your credit risk than any other method, PMI will gladly perform a FREE “Net30Score Validation Analysis” based on your AR data.
PMI’s analysis compares the Net30Score predictions to the actual results and provides you with various outputs that let you know just how well Net30Score did and what you can expect if Net30Score is implemented at your company. PMI can validate different BAD definitions. This validation analysis, using only your company’s internal data, is prepared at no cost so that you can properly evaluate the applicability of Net30Score without any financial risk. Also, if you are currently using another type of scoring, if you provide PMI with those scores will be happy to provide you with a “Champion–Challenger Analysis” to show you how much more predictive Net30Score is over your current solution.
Benefits of Net30Score
- Reduced DSO and accounts receivable write-offs
- Lower credit and collection costs
- Score all customers, not just bureau hits
- Significantly improves collection department performance by prioritizing collection resources based upon inherent risk
- Optimize credit line management
- More accurate estimates of bad-debt reserves and improved forecasts of monthly cash flow
- Aids in Sarbanes-Oxley compliance
Net30Score Integrated Into Credit & Collection Applications
As many Credit & Collection departments are now using automated credit & collection software applications to more efficiently manage their department’s daily workflow, PMI has developed partnerships with several of the leading software vendors who provide these types of platforms. With each of these partner companies Net30Score has been seamlessly integrated help drive risk analysis and collection prioritization.
The following are our integration partners:
Credit & Management Systems - Corporate Credit Manager
eCredit - Credit & Collections
Global Visions Solutions - WorkflowAR
SunGard AvantGard - GETPAID
