We are becoming all too accustomed to data breaches and minimal safeguards on our privacy in the digital world. Yet, if we put all that aside, is all the data we have access to these days even worth it? There seems to be a connotation that more data means you will be more right, but data itself does not mean anything. This is especially true in the credit and collection process. As credit managers have access to more and more data about their customers, it is very easy to make worse decisions. Here are some good questions to ask yourself to avoid being blinded by all this new information.
Am I just using data to reinforce my current beliefs?
The problem with adding all of this new data to your credit process is that people tend to look for validation of their current beliefs. What I mean is that many companies are using this data to simply reinforce their current beliefs about how things should be done instead of using it to open their eyes to new possibilities. You may find that your intuition was right all along, but the data is useless if you do not look at it with an open mind.
How can this data translate into helping my bottom line?
This may seem obvious but at the end of the day, all of this data you can find on customers, businesses and industries is only useful if it helps your bottom line. This does not mean that any information you do not currently use is useless. It means that you need to sit down and see how you can connect all of the data you have what part of the credit and collection process it can aid.
What piece of information would be great to have?
In a similar vein to the paragraph above, it is important to think about what data you think would help your credit process. Would it be nice to know the average pay time for certain industries or certain aged companies? Would you like to know your average call time on successful vs unsuccessful calls? Do you think knowing what size company has the most debts turned over to collections would be helpful? How about the average pay time for each salesperson or the reason that you needed to resend an invoice? It is impossible to figure out these metrics if you were not already tracking these pieces of data. This is why it is important to figure out what metrics would aid your credit decisions and start gathering the necessary data.
Collecting and researching data for the sake of having a big collection data will never help your business grow. Used correctly and intelligently though, it can help you make smarter credit and operational decisions that lead can lead to increases in your bottom line. Check out some of our own suggestions on how to use data effectively.