Enter receivables data
This page uses a single-column layout for content sections. Only the input grid expands to three columns on large screens.
Example data table
Use this sample to test the calculator or compare period-to-period collection performance.
| Period | Beginning AR | Net Credit Sales | Ending Total AR | Ending Current AR | Reported CEI |
|---|---|---|---|---|---|
| January | $180,000 | $160,000 | $120,000 | $90,000 | 88.00% |
| February | $120,000 | $170,000 | $118,000 | $88,000 | 85.15% |
| March | $118,000 | $175,000 | $110,000 | $82,000 | 86.73% |
| April | $110,000 | $182,000 | $104,000 | $76,000 | 87.04% |
Formula used
The reported Collections Effectiveness Index measures how much collectible receivables were actually converted to cash during the period.
Net Credit Sales = Gross Credit Sales − Sales Returns − Cash Discounts − Non-Trade Adjustments
Expected Collections = Beginning AR + Net Credit Sales − Ending Current AR
Reported Actual Collections = Beginning AR + Net Credit Sales − Ending Total AR
Reported CEI = (Reported Actual Collections ÷ Expected Collections) × 100
Normalized Ending AR = Ending Total AR + Bad Debt Write-Offs − Recoveries
Normalized CEI = ((Beginning AR + Net Credit Sales − Normalized Ending AR) ÷ Expected Collections) × 100
DSO = ((Beginning AR + Ending Total AR) ÷ 2 ÷ Net Credit Sales) × Days in Period
The normalized view helps you see whether write-offs improved the reported result without reflecting true cash collection quality.
How to use this calculator
- Enter opening trade receivables for the period.
- Enter gross credit sales only, then remove returns, discounts, and non-trade items.
- Provide ending total receivables and the portion still considered current.
- Add write-offs and recoveries to compare reported and normalized performance.
- Set days in period and a target CEI for internal benchmarking.
- Click Calculate CEI to show results above the form and below the header.
- Review the gauges, collection bridge, DSO, and gap metrics.
- Use the CSV or PDF options to save your report.
Frequently asked questions
1. What does CEI actually measure?
CEI measures how efficiently receivables that should have been collected were actually converted into cash during a period. It focuses on collection execution, not just sales growth.
2. Why can CEI be above 100%?
A CEI above 100% can happen when collections include amounts from older balances faster than the theoretical target, or when timing differences make ending receivables unusually low.
3. Why show both reported and normalized CEI?
Reported CEI follows the ledger as recorded. Normalized CEI adds back write-offs and removes recoveries to show whether headline performance was helped by accounting cleanups rather than cash collections.
4. Should cash sales be included?
No. CEI is designed for credit collections. Including cash sales overstates collectible volume and can distort both the expected collections calculation and the final index.
5. What counts as ending current receivables?
Ending current receivables are balances still within agreed payment terms at the period end. They are not yet overdue, so they remain in the collectible base rather than the delinquent balance.
6. How often should CEI be reviewed?
Most teams review CEI monthly. High-volume businesses may also track it weekly, especially when they want faster feedback on follow-up discipline, disputes, and customer payment behavior.
7. Can CEI look weak while DSO looks stable?
Yes. DSO is an average-balance measure, while CEI focuses on collectibility against what should have been collected. A stable DSO can hide recent slippage in overdue recovery.
8. What is a good target CEI?
Many finance teams aim for 95% or higher, but a realistic target depends on customer mix, billing quality, dispute rates, and contractual payment terms.