Bad Debt Collection Effectiveness Index Days Sales Outstanding 
Your Virtual Credit Manager
FEBRUARY 21, 2023
If your AR is deteriorating, you better diagnose the problem as quickly as possible so you don’t incur cash flow problems and bad debt losses. Even so, we still recommend plotting the count-back method for calculating DSO against sales volume and AR balances. Here’s our recommendation for three key metrics to track.
Gaviti
APRIL 11, 2024
Are you able to collect invoices on all of the revenue your business generates? What are the average days sales outstanding? How much bad debt does the company have, and how has this changed over time? Collection effectiveness index: This measures how well you collect payments from customers.
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Your Virtual Credit Manager
AUGUST 29, 2023
As you review your metrics, here are five signs that there may be a problem with your collection practices: DSO Is Rising: Days Sales Outstanding is the most common metric for measuring accounts receivable (AR) performance. As the saying goes, you can’t manage what you don’t measure.
Grit
MAY 26, 2024
This speed improves cash flow and reduces the risk of late payments and bad debt. Advanced analytics can help businesses track key performance indicators (KPIs) such as days sales outstanding (DSO), collection effectiveness index (CEI), and average payment period.
Gaviti
NOVEMBER 24, 2024
Although different A/R solutions deliver different metrics, cash balance and days sale outstanding only scratch the surface of measuring performance. Additional metrics to consider include the number of outstanding receivables, accounts receivable aging, customer churn rate, and the percentage of late payments.
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