Collection effectiveness index: Telling the entire credit and collections story

Your Collection Effectiveness Index (CEI), when coupled with Days Sales Outstanding (DSO), tells a holistic credit and collections story.

CEI is a calculation of a company’s ability to retrieve accounts receivable (AR) from their customers. In other words, CEI compares the amount collected in a given time period to the amount of receivables available for collection. A CEI near 80 percent or above indicates a highly effective collections process, while a CEI 50 percent and below is considered low and should be further evaluated.

In this tip sheet, we will explore why CEI matters, how to calculate CEI and how to use CEI to drive value for your business.