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How FlexPay Calculates Recovery

Accurate reporting is essential to properly measure the performance of your payment recovery efforts. This article will explain how FlexPay calculates recovery performance so you can replicate it in your own internal reporting tools.

We base everything on the date that we first receive a decline. The recovery rate is calculated using the dollar value received. The calculation is fairly simple:

$ Recovered Declines (Approvals) / $ Total Received Declines = Recovery Rate

A few key points:

  • The value of declines we receive on a given day becomes the denominator. 
  • As the recovery process continues, the value of approvals among the transactions received on that given day becomes the numerator. 
  • The Recovery Rate evolves as transactions are reattempted.
  • Once the full recovery cycle has completed (after 30 days), we have the final recovery rate for the transactions received on that particular day. 
  • Any reporting should only include transactions that were actually sent to FlexPay. If any declines are filtered out before being sent to us, they should not be included in the denominator.

Here is an example:

  • On June 1st, FlexPay receives $1000 in declines. 
  • On June 15th, we have gotten approvals for $250. Our current approval rate for declines received June 1st is 25%. 
  • By end-of-day on June 30th, we have managed to recover $350. We will no longer attempt to recover any of the transactions received on June 1st, so our final recovery rate for transactions received on that particular day is $350/$1000 = 35%.

We apply this logic to each calendar day using the UTC timezone.

In the example above, if it's July 1st and you were looking at a report showing recovery for June 1-30, only June 1st would have a final recovery rate, while every other day would still be "in progress". The displayed recovery rate for that timeframe would be the total $ Approvals / $ Declines for that time period. 

It would be good to differentiate completed recoveries vs. those that are still in progress. The simplest way would probably to use a different color in a chart or graph to show dollar values that are still within 30 days. Another way to show that transactions are still in progress is to highlight the dollar value of all transactions that have a next retry date scheduled.

Nic is the author of this solution article.

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