How Collection Priority works

Collection Priority is the scoring model behind Drypowder's account ranking. This article explains why it exists, what it optimizes for, and how it differs from the ways AR teams have traditionally prioritized their work.

The problem it solves

Ask an AR manager how they decide which customer to call next and you will get a variety of answers. Some work alphabetically. Some sort by balance, largest first. Some sort by aging, oldest first. Some use a gut feeling built over years of experience. Most combine all of these in their head, which works until it does not. When there are 400 accounts and 8 hours in a day, the mental math breaks down.

The fundamental problem is that "who to focus on next" is a multi-variable question. A $50,000 account that is 15 days past due from a reliable customer is probably fine. A $5,000 account that is 90 days past due from a customer who has been late repeatedly is probably not. But what about a $30,000 account that just crossed the 31-day threshold and has invoices spread across three aging buckets? That one requires weighing balance, aging, and distribution all at once.

Collection Priority does that weighing for you. It assigns each account a score from 0 to 10, so you always know where to start.

What it optimizes for

Collection Priority answers one question: "Where will attention have the most impact on collections right now?"

This is different from "who owes the most" or "who is the most overdue." A $200,000 account at 10 days is a large exposure but probably does not need a phone call yet. A $500 account at 120 days is deeply overdue but may not be worth significant effort if it is effectively uncollectable. Collection Priority tries to find the accounts in the productive middle: significant enough to matter, overdue enough to warrant action, and current enough that effort will produce results.

The scoring model weighs several factors together.

Outstanding balance. Larger balances represent more cash at risk. All else being equal, a high-balance account scores higher than a low-balance account.

Aging distribution. Money that has been outstanding longer is harder to collect. Balance concentrated in the 61–90 or 91+ day buckets scores higher than the same total in the current or 1–30 day bucket.

Weighted average days overdue. This single number captures both how overdue the account is and how much of the balance is overdue. A $50,000 invoice at 60 days moves the weighted average much more than a $500 invoice at 60 days.

Why not just sort by balance or aging?

Sorting by balance alone pushes small but deeply overdue accounts to the bottom of the list. Those are the accounts most likely to become bad debt if left unworked.

Sorting by aging alone ignores dollar impact. A $200 invoice at 120 days shows up at the top of an aging sort, while a $40,000 invoice at 35 days, which actually needs attention, sits lower.

Collection Priority combines these signals so the top of the list represents accounts where focus will be most productive, regardless of whether the primary driver is balance, aging, or some combination.

The 0 to 10 scale

The score runs from 0 (no urgency) to 10 (highest urgency). There are no hard tiers or color labels. The value is in the ranking order, not in the absolute number. The difference between a 6 and a 7 is not meaningful; the difference between a 2 and an 8 is.

Think of it like a priority queue: the scoring model sorts the queue, and your job is to start at the top.

What Collection Priority does not do

It does not predict whether a customer will default. It does not recommend credit limit changes. It does not know that a contractor is waiting for a builder draw and will pay next Friday. It is a triage tool that ranks urgency based on the AR data it can see.

Human judgment fills the gaps. An experienced AR manager who knows that a particular account always pays on the 15th can deprioritize it in their own workflow even if the score is high. The score surfaces the work, and the person decides what to do with it.

Related

• Collection Priority reference — Score ranges, factors, and the FAQ.
• Review and prioritize accounts — Using the score in your daily workflow.