To evaluate AR management using Collection Effectiveness Index (CEI), calculate the ratio of the cash collected to the total amount of outstanding receivables over a specific period. A higher CEI indicates more effective collection efforts and better AR performance, while a lower CEI suggests inefficiencies in collecting outstanding balances. Regularly track CEI, analyze its trends, and adjust collection strategies accordingly to optimize AR management and maximize cash flow.
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Emagia is a leading provider of AI-powered Order-to-Cash (O2C) automation platform that modernizes finance operations for midsize to large global businesses. Many global businesses and shared service centers use Emagia’s Enterprise Receivables Management System to transform to digital world-class operations in credit, invoicing and payments, receivables, collections, deductions, cash application and cash forecasting. Emagia solutions improve their customers DSO, cash flow, credit risk, operational cost, compliance and profitability.
