Glossary · Receivables metrics
Collection Effectiveness Index (CEI)
The Collection Effectiveness Index (CEI) measures the share of collectable receivables actually collected in a period, as a percentage.
CEI compares what you collected with what you could have collected. The numerator is what was collected in the period; the denominator is what was due to be collected — everything that was owed, less what is still legitimately not yet due at the end.
A CEI of 100% means everything due was collected. Unlike DSO, it isn’t distorted by a jump in sales, so it is a fairer way to judge a collections team or process month to month.
CEI is usually calculated monthly. Use it next to DSO and the aging report: DSO for the trend in cash, CEI for how well the collection effort is doing.
Formula
CEI = (opening receivables + credit sales − closing total receivables) ÷ (opening receivables + credit sales − closing current receivables) × 100
Example
A month opens with €100,000 owed. Credit sales are €80,000. At month end receivables are €95,000, of which €60,000 is current. CEI = (100,000 + 80,000 − 95,000) ÷ (100,000 + 80,000 − 60,000) = 85,000 ÷ 120,000 = 70.8%.