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6 Cash Flow Performance KPIs Every CFO Needs to Track

Gaviti

Collection Effectiveness Index (CEI) CEI compares receives collected in a given time period against the receivables available in that same period. Similar to DSO, this cash application KPI offers a broad measure of how effective your collection efforts are. (DSO

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Accounts Receivable Performance Metrics: 5 KPIs You Should Be Tracking

Gaviti

To calculate traditional DSO , take the total A/R balance sheet, divide it by your total sales and multiply the quotient by the number of days in the period you want to measure. It’s a comparison of how much you were owed at the beginning of the period versus how much you actually collected during that same period.

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Evidence It's Time to Adjust Your Collection Practices

Your Virtual Credit Manager

30, 60, 90+ days past due), it suggests that your collection efforts might not be keeping up with customer payment schedules. When both sales and DSO are rising, checking your percentages past due will provide a good indicator that collections are lagging. Then multiply the answer by 100 to get a percentage.

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7 Strategies to Reduce DSO and Enhance Cash Flow

Gaviti

Best Possible DSO Formula The formula for Best Possible DSO is: (Current Receivables x Number of Days in Period) Ă· Credit Sales for Period 7 Strategies to Reduce DSO Since DSO reduction is such an important element of your accounting operations, many companies turn to tools such as DSO reduction software to assist them.

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