YayPay’s Collections Effectiveness Index (CEI) Calculator is designed to provide you with your CEI, so you can measure your team’s ability to collect funds from customers. Simply input your beginning receivables, ending total receivables and ending current receivables to find out your CEI.
This CEI calculator determines a finance team’s CEI, a measurement that shows how much was collected from a pool of all available accounts receivables which indicates the effectiveness of a team’s collections process.
Beginning receivables
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Ending total receivables
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Ending current receivables
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Monthly credit sales
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CEI is the calculation of a company’s ability to collect payment from customers. The benefit of CEI is that it’s an effective measure at shorter intervals (weekly/monthly), while DSO is more accurate with a volume of data feeding it. DSO is more useful at quarterly, semi-annual, or annual intervals, with CEI used in the interim.
Since CEI is the percent of invoices paid in a given period, 100% is the perfect score. Averaged across all industries, data from Credit Research Foundation show a CEI median near 85%, but much lower (55-65%) in transportation and fabricated metal. Food products, petroleum, coal, chemicals, and electrical products have demonstrably higher CEIs, tipping the scales at 97% or more.
Evaluate and align your accounts receivable team, tools and protocols with the company’s AR goals to improve your collections process.
Understanding CEI allows businesses to identify potential inefficiencies in their current process, this can be improved by looking at:
Download our Ultimate AR Collections Benchmarks Report to learn more tips on how to improve your Collections Effectiveness Index and every other key metric you’ll need to become a revenue hero. You can also book a consultation with one of our AR experts to discover the power of Smart AR and you could reduce your DSO by 34% on average.
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