Data and Efficiencies are the driving forces behind well-run commercial equipment finance and leasing operations. Do you have "real time" data and are you using that data effectively to make the best decisions? The following are few examples of requirements for top producers and managerial teams:
Accurate month-end financial, sales, collection, and credit reports are available within hours of closing (not days or weeks). Management teams must have this information at the click of a button to properly react to positive and negative trends.
Portfolio performance reports based upon multiple matrices (i.e., equipment, industry, territory, vendors, term, etc.). This information should be readily available to originators to help direct their solicitation efforts.
Ranking reports reflecting profitability in different sectors based upon static pools of assets.
Approval ratios and funding ratios based upon origination sources (i.e., vendors, brokers, internal sales reps, etc.).
Trends and activity reports on top relationships.
Comparison reports based upon annual budgets and individual business plans.
Progress on priority initiatives.
Some companies believe data is strictly to be used by the top management. However, top performing companies routinely share their monthly information with staff members to help them better understand their personal impact and importance.
The value of a company is significantly increased when it can produce relevant data and disseminate the data to those who can use the data effectively to grow production and bottom-line profits. Data is powerful in the right hands. Data allows credit professionals to make better credit decisions. Data allows sales professionals to solicit stronger relationships which align with a company's goals and objectives.
In the past, commercial equipment finance and leasing companies were antiquated in developing and using data. Most companies tracked a dozen or less matrices and often had results that were outdated when delivered to the management team. Data was a rear-view perspective of what had happened. In 2021, data is being generated in real time. Companies are tracking dozens of different matrices and using the data to predict future outcomes, The data is being used proactively to manage teams and to stay ahead of competition. More importantly, companies are providing information to their staff to better perform at every stage of the process.
Data is essential in buying or selling a company. A seller must be able to provide meaningful data over several years and to present how data was used to substantiate the company's current position in the commercial equipment finance and leasing industry. The seller should be able to use its current data to project future performance under its current ownership and how performance will be altered based upon the buyer's expectations. Buyers are interested in the data supplied; however, valuations can be significantly increased when a seller can also show the process by which its management team uses "real-time" data to influence the company's actions effectively and efficiently.
Data and how it is used matters.
Are you tracking the correct matrices?
Wheeler Business Consulting works with banks, independents, captives, origination companies, and investors in the equipment leasing and finance arena. We provide training, strategic planning, and acquisition services. Scott Wheeler is available to discuss your long-term strategy, to assist your staff to maximize outcomes, and to better position your organization in the market.