Revenue Leakage Calculator

Size of your business

Average accounts receivable per month

Accounts receivable(AR) staff headcount

Month-end close process staff headcount

Percentage of monthly write-offs

40%

Days to month-end close

Annual per employee cost

Split of past-due accounts receivable in the following aging buckets

More than 3 months

40%

Between 4-6 months

35%

Between 7-12 months

25%

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Annual Revenue Leakage

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42% of companies experience some form of revenue leakage

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Revenue Leakage Report

Sources of revenue leaks

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Where is the leak?	How to fix it?
Write-Offs Write-offs are direct revenue leaks that can seriously hurt your business. A higher write-off indicates that you may have extended a line of credit to customers and are incapable of paying back the debt, resulting in delayed, reduced, or missed payments. Furthermore, you may have implemented substandard collection strategies with collectors having poor negotiation skills, which adds to the increased risk of write-offs.	Increase the frequency of evaluating the credit risk of your customer portfolios Ensure constant monitoring of credit fluctuations and revise the credit limits accurately Ensure standardization of collections processes and upskilling collectors
Late Payments Late payments limit cash flow and working capital, impeding the smooth operation of business processes and, in the long run, its growth. It mainly happens due to the inability to prioritize high-risk customers, and missed payment reminders. According to a study by NACM, the value of $1 reduces to 46 cents after 6 months. Hence, if you do not have a proactive collections approach, there is a high chance of losing money due to dollar value depreciation.	Identify the high-risk accounts by categorizing them based on AR aging reports, and past payment history Empower your collectors with ready-to-use correspondence templates to send periodic payment reminders
Staff Headcount Cost in Accounts Receivable The manual processes in accounts receivable lead to major inefficiencies and requires excessive labor utilization. Your revenue might be growing, but at the same time, operational resource requirements could be leaking dollars. According to APQC, ideally, only 10 FTEs are required to handle accounts receivable operations in an enterprise, 5 in mid-sized businesses, and 3 in small businesses. So, if you are utilizing more resources than this, you are leaving money on the table that could be used elsewhere.	Identify and fix broken processes that are manual and repetitive in nature Leverage technology to streamline accounts receivable operations and empower lean teams to do more with less
Staff Headcount Cost in Financial Close One of the most difficult times for the CFO Office is the financial close. Teams remain heavily reliant on manual processes and legacy tools to manage the task which affects overall operational efficiency. As per a record-to-report survey by HighRadius, ideally it takes 5 days to complete the process with automation. Spending more time than this suggests that your financial close process is unoptimized and unnecessary resources are being used.	Utilize monthly close checklists to decide action items for each month Incorporate automation to achieve faster and smoother financial close

Where is the leak?

How to fix it?

Write-Offs
Write-offs are direct revenue leaks that can seriously hurt your business. A higher write-off indicates that you may have extended a line of credit to customers and are incapable of paying back the debt, resulting in delayed, reduced, or missed payments.
Furthermore, you may have implemented substandard collection strategies with collectors having poor negotiation skills, which adds to the increased risk of write-offs.

Increase the frequency of evaluating the credit risk of your customer portfolios
Ensure constant monitoring of credit fluctuations and revise the credit limits accurately
Ensure standardization of collections processes and upskilling collectors

Late Payments
Late payments limit cash flow and working capital, impeding the smooth operation of business processes and, in the long run, its growth. It mainly happens due to the inability to prioritize high-risk customers, and missed payment reminders. According to a study by NACM, the value of $1 reduces to 46 cents after 6 months. Hence, if you do not have a proactive collections approach, there is a high chance of losing money due to dollar value depreciation.

Identify the high-risk accounts by categorizing them based on AR aging reports, and past payment history
Empower your collectors with ready-to-use correspondence templates to send periodic payment reminders

Staff Headcount Cost in Accounts Receivable
The manual processes in accounts receivable lead to major inefficiencies and requires excessive labor utilization. Your revenue might be growing, but at the same time, operational resource requirements could be leaking dollars.
According to APQC, ideally, only 10 FTEs are required to handle accounts receivable operations in an enterprise, 5 in mid-sized businesses, and 3 in small businesses. So, if you are utilizing more resources than this, you are leaving money on the table that could be used elsewhere.

Identify and fix broken processes that are manual and repetitive in nature
Leverage technology to streamline accounts receivable operations and empower lean teams to do more with less

Staff Headcount Cost in Financial Close
One of the most difficult times for the CFO Office is the financial close. Teams remain heavily reliant on manual processes and legacy tools to manage the task which affects overall operational efficiency.
As per a record-to-report survey by HighRadius, ideally it takes 5 days to complete the process with automation. Spending more time than this suggests that your financial close process is unoptimized and unnecessary resources are being used.