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Further Gamifying Accounts Receivable

In the not too distant past, I talked about how to use game mechanics in accounts receivable so as to help ensured that a business gets paid, but what about the people who are doing the collections?

Accounts receivable is tedious and draining work that involves a lot of repetition, so why not use game mechanics so that it is more engaging, rewarding and yields better performance out of the employee?

Applying game mechanics to business processes is tricky, because the last thing you want to is trivialize the work or condescend to the employee. For me, coming into a job and hearing someone say, in all seriousness, “Let’s go play the Accounting Game!” is the stuff of nightmares, and I love accounting.

So, how to use game mechanics in collections? Thankfully, this is relatively easy to do, since collections enjoys a clear goal, the collection of money from accounts.

To do this, the best approach is not to create a game and insert it into the collections process, but rather, take what tasks employees already perform and make them into a game.

To start, assign a point value to every percentage of the total accounts receivable ledger that a particular employee is responsible for. Doing it as a percentage is important, since different employees are responsible for different accounts and will have different amounts that they need to collect.

Secondly, depending on whatever criteria is used at your company, assign each invoice a rating category from new, to concern, to critical, or whatever ever gradients work for your company, and with each gradient being worth different point values. Also, add a point bonus for every time an employee clears all of the invoices marked for a rating category, except for new. For critical invoices, for every critical invoice not collected, subtract points from an employee.

This begs the question of what to do with invoices or amounts that have to be written off. I believe the best solution is to remove points from employees for invoices, accounts and amounts that are written off that they are in charge of. This disincentivizes write offs and will encourage employees to be more aggressive with troublesome accounts. Mind you, the point deduction for a write off should not be as severe as the one for not collecting from a rated critical invoice or account, since the decision to write off an amount should be agreed upon by management.

But we are not done, when an employee collects from an invoice and the payment is posted, your accounting system needs to post, immediately, the gain in points for the employee in a place where the employee can see it easily. This can be just about anywhere, from an intranet site to a scoreboard in the office.

It is important to have these scores publicly available to other employees in the company, for this increases not only the social pressure to perform, but also it increases the participating employee’s perception of the status they gain by performing well.

I would not stop at points, however. Instead, incorporating achievements into the workplace can also have great affect. These achievements can be based upon any number of things, be it being the first to clear a rating category within a month, to collecting a certain amount over the lifetime of a person’s employment in the collections department.

What is great about achievements, especially ongoing, public achievements, is that they provide an emotional reward for a job well-done without costing the company extra (though do not be surprised if they are used as an argument for a raise during the annual performance review).

By doing these things, not only does a company increase engagement, but they also create greater job satisfaction and make better use of the competitive instinct. Another advantage is that it enables companies to identify those players that consistently bring good value to the company. Yes, coming in first within a period is a good thing and should be celebrated, but it is more likely that the top performer will constantly change hands. It is that person who continually comes in the upper-tiers, even if they never place in the ranking, that are the backbone for any company, and these are often the people who are overlooked in favor of rewarding the occasional big winners and punishing the low performers.

In short, by using game mechanics in collections, companies can ensure their continued productivity and cash flows, and be less reliant on debt-financing.