Your Virtual Credit Manager

JUNE 25, 2024

A rising DSO indicates that your collections are not matching the rate of new sales, and if that goes on for any length of time, your cash flow will not be able to support the volume of your current business operations. If the dollar weighted average and/or median scores keep dropping, the probability for defaults is going to rise.

Bad Debt 130

Bad Debt Credit and Collections DSO Days Sales Outstanding 130

Your Virtual Credit Manager

AUGUST 29, 2023

Use the following formula to determine your CEI: (Beginning receivables + Monthly credit sales - Ending total receivables) ÷ (Beginning receivables + Monthly credit sales - Ending current receivables). Then multiply the answer by 100 to get a percentage.

DSO 130

DSO Credit and Collections Bad Debt Collection Effectiveness Index 130

Your Virtual Credit Manager

OCTOBER 2, 2024

Who absorbs any potential bad debt loss — does the lender have recourse to return the AR if they cannot collect it versus a non-recourse arrangement? To receive new posts and support this work, please consider subscribing for $5 monthly ($49 yearly). Do you need help assessing your customers’ credit risks?

Past Due Invoices 130

Past Due Invoices Credit and Collections Deductions Accounts Receivable (AR) 130