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Wayne Spivak President & CFO

Does anyone use the Collection Effectiveness Indicator?

Asked on April 7, 2017

The formula is: Beginning Receivables + (Credit Sales/N) – Ending Total Receivables ⸺⸺⸺⸺⸺⸺⸺⸺⸺⸺⸺⸺⸺⸺⸺ Beginning Receivables + (Credit Sales/N) – Ending Current Receivables multiplied by 100 to give a readable percentage. The closer you get to 100% the better. I've read this is a better KPI than DSO. Opinions?

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