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Corporate Performance Management (CPM)

Corporate performance management is the process of reviewing and controlling a company’s operations to achieve its strategic objectives. A successful CPM system includes key components, such as performance measurement, performance analysis, and performance improvement. Let’s take a closer look at how to structure CPM for your organization, the benefits it provides and how AR automation can help.

What Is a Corporate Performance Management System?

It refers to the process businesses use to manage and improve their operations. More often than not the system relies on automation. It includes tools for performance measurement, performance analysis, and performance improvement. Businesses can use CPM systems to manage all aspects of a company’s operations, including sales, marketing, customer service, finance, and human resources.

What Are the Benefits of Using Corporate Performance Management Software?

Management is one of the many tasks tech companies cannot yet automate. Even so, leveraging software can eliminate some of the tedious and repetitive tasks managers perform. This frees managers to tackle the tasks that require human intelligence, creativity and relationship management. It also ensures managers have accurate, real-time data to make informed decisions and seize opportunities that arise.

CPM systems also help businesses accomplish the following tasks:

  • Track their progress
  • Identify areas of improvement
  • Implement changes to improve operations
  • Save time and money
  • Improving efficiency and productivity

What Are Some Common Frameworks Used for Corporate Performance Evaluation?

Companies have a wealth of frameworks available for corporate performance assessment. These options are some of the most common ones business managers rely on.

1. Balance Scorecard

The most common framework used for corporate performance evaluation is the balanced scorecard. This framework provides a comprehensive approach to evaluating a company’s performance across four perspectives:

  • Financial
  • Customer
  • Internal business process
  • Learning and growth

2. European Foundation for Quality Management Excellence Model

This framework works on a self-assessment basis and helps organizations determine what they can do to provide an excellent level of service to all key stakeholders. To accomplish this, the EFQM excellence model focuses on nine criteria:

  • Leadership
  • Strategy
  • Policy and planning
  • People
  • Partnership and resources
  • Processes
  • Customer results
  • Society results
  • Key performance results

3. Key Performance Indicators

Managers use KPIs to measure and track different performance sectors of an organization. In fact, managers can use KPIs at all levels of an organization to assess individual, departmental, product and company-wide performance. Some commonly used KPIs include inventory turnover, DSO, and profit.

4. Six Sigma

This is a methodology for improving business processes. It relies on data-driven decision-making and the use of statistical analysis to improve process performance. Companies also often rely on this for project management and workflow improvement.

5. Management Process Ownership

The MPO model is a framework for managing and improving business processes. This model is similar to the Six Sigma methodology, but it does not require the use of statistical analysis. It includes four steps:

  1. Define the process
  2. Measure the process
  3. Analyze the process
  4. Improve the process

What Is the Difference Between CPM and Employee Performance Management?

CPM tackles the performance of an entire company, while employee performance management focuses on the individual performance of employees. Consequently, CPM systems include tools for measuring and analyzing company-wide performance. In contrast, employee performance management includes tools for tracking and improving the individual productivity of employees.

How Can Accounts Receivables Software Improve Corporate Performance?

Strong cash flow is a top indicator of a healthy business that can meet all its financial obligations. This, in turn, contributes to revenue and high profit margins. Business managers can achieve this by leveraging technology to automate AR processes, boost cash flow and boost corporate performance.

Those that are familiar with the workforce management space need no introduction to Monday.com and its powerful work OS tool. Monday.com recently moved to an automated accounts receivable (A/R) collection system, powered by Gaviti, to replace its outdated annual reporting methodology.

From Monday.com’s accounts receivables department:

With our business and sales growing exponentially, Gaviti has been a key tool in ensuring our DSO has not only stopped increasing but also shown improvements over a relatively short period of time. The ease of use combined with a highly responsive and helpful team… We have been able to quickly implement a comprehensive and versatile collections process.

When you stop to consider the broader, organizational benefits of automated A/R solutions, it’s easy to understand why Monday.com was so successful. The right A/R collection software can improve cash flow as well as the performance of key metrics – such as days sales outstanding (DSO) – within your organization.

Improve DSO Collection Processes

At its core, DSO collection is a cash flow problem. According to a U.S. Bank study, 82% of businesses fail due to poor cash flow management.

Part of this issue is attributable to the time-consuming processes inherent in manual collections. DSO collections and cash flow already vary from month to month. When you add the time spent managing spreadsheets across late payments, grace periods, and lines of credit, you have an untenable system where staff spends more time corralling reports than processing payments. And while you may not enjoy managing the nitty-gritty details of your business’s finances, your financial processes are ripe for optimization. Consider just a few ways that accounts receivable collection software can streamline your enterprise DSO:

  • Collect on accounts when they’re due with automated customer reminders
  • Create a single source of truth with a centralized A/R database that eliminates the need for tracking/compiling across different spreadsheets
  • Faster invoicing through the elimination of unnecessary payment delays
  • Standardize your process for consistent, repeatable collections every time
  • Streamline payment collection for clients, decreasing the odds of entry errors and making it more likely you’ll get paid on time

When you work to improve your accounts receivable collection, you’re working toward a healthy financial process where DSO stays low. But that’s not the only benefit of an A/R collection solution.

Stay Informed

5 Benefits of Automated Accounts Receivable Collection

In any discussion about the benefits of accounts receivable automation, it’s important to cover the broader benefits it provides:

  1. Better staff efficiency by reducing the manual hours required to perform collections tasks – all those hours you spend chasing invoices, calling clients, or writing follow-up emails add up.

  2. Ensure your data’s accuracy – real-time accurate data will prevent your company from making errors.

     

The benefits of the accounts receivable collection software are clear, and once you’ve deployed
automation,
you’ll have a hard time going back.

A/R Collections Best Practices

Although automated accounts receivable software brings a new dimension to your financial processes, the fundamentals of accounts receivable best practices remain the same. It’s a straightforward process that nevertheless tends to get bogged down by inefficiency. This is where automation software pays off.

Consider how you can leverage financial technology like this throughout your organization to improve key financial metrics. Technology is one option. Outsourcing accounts receivable collections to a service provider that can handle all the details for you is another. You have plenty of options, and now it’s just a matter of selecting which improvements will yield the best results for your enterprise.

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