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AR glossary

What is Collection Effectiveness Index (CEI)?

The Collection Effectiveness Index measures how much of what you could have collected in a period you actually did collect. 100% means everything collectible came in.

Formula

CEI = (Opening AR + Credit sales − Closing total AR) ÷ (Opening AR + Credit sales − Closing current AR) × 100

Example

Opening AR ₹2.0 Cr, credit sales ₹1.5 Cr, closing AR ₹1.8 Cr of which ₹1.0 Cr is not yet due. CEI = (2.0 + 1.5 − 1.8) ÷ (2.0 + 1.5 − 1.0) = 1.7 ÷ 2.5 = 68%.

Why it matters

DSO moves with sales volume; CEI doesn’t. It isolates how well the team collects, which makes it the fairer number to track month to month and to set team goals against.

In Creditouch

Collection effectiveness sits next to DSO on the dashboard, with a “needs attention” marker when it slips.

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