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Accounts Receivable Collections Incentives

Amit Saini's Profile

I am looking to get a sense for industry practices around incentive's AR staff to improve collections. Do you incentive your AR staff above and beyond their normal pay. If so, what measures to you use to determine the incentive, and how do you continue to raise the bar?

As a point of reference, I work in the workers compensation and Rehab Center healthcare industry, so receivables are typically due from Medicare, medicaid, insurance, and client self pay.

I would like to see an example of your matrix.

Best Regards!


Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |

I've only seen incentives that were outliers.

In other words, if your term is Net 30 and your DSO is 45, I would look at giving incentive pay for anything collected over 90 days. If it slips to over 120 I'd give more.

As a kicker, assuming each collector has a standard set of accounts, another collector goes after those dollars. (keeps more honesty in the system)

As for the amount, if you go to a third party you will have ate approximately 30% in fees, so there is your top number...

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

I would give incentives for those who prevent delayed/slow collections.
"Prevention is better than cure."


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