---
title: "What is a good collection effectiveness index (CEI)?"
description: "What a good CEI score is, why 80% is closer to the middle than the top, how your terms and the length of the period move the number, and how to find the customers who pull it down."
url: https://www.paidnice.com/blog/good-collection-effectiveness-index
---

# What is a good collection effectiveness index (CEI)?

Written by

Ashley Schroder
Personally tested

Co-founder of Paidnice

Ashley tested the CEI tile on the Paidnice dashboard against the Credit Research Foundation's latest survey medians, and traced why a single late customer can swing a monthly score.

Reviewed by Jack Daffron

Co-founder of Paidnice

Published Nov 9, 2026 · 7 min

## Summary

A good collection effectiveness index is 80% or higher, and 90% or more is strong. Treat 80% as the middle, not the top: the median in the Credit Research Foundation's national survey was 79.35 in the second quarter of 2026. Read your score over 90 days, not one month, and against your own trend.

- **Score bands:** Below 70% means a lot of what fell due was not collected. 70% to 80% is below the middle. 80% to 90% is solid. 90% and above is strong.
- **Why it moves:** A short period with few invoices falling due lets one late customer swing the score. A 90-day window gives a steadier read.
- **What to do next:** Find the customer group that pulls the score down, then tighten reminders, statements and follow-up for that group first.

Your dashboard shows a collection effectiveness index of 78%, and every guide you find says anything under 80% is a problem. Then you notice that two of the biggest overdue balances belong to accounts you stopped chasing months ago, and they are still in the number.

Here is what a good CEI score is, why the same score means different things for different businesses, and how to find what is pulling yours down. To get your own number first, [work out your CEI with the calculator](https://www.paidnice.com/calculators/collection-efficiency-formula-calculator), or read the [CEI definition](https://www.paidnice.com/dictionary/collection-effectiveness-index).

Free: Payment reminder email templatesCopy the reminder emails for before, on and after the due date.

## What is a good CEI score?

A good CEI score is 80% or higher, and a score of 90% or more is strong. CEI is the share of the money that was collectable in a period that you actually collected, so 100% would mean every dollar that fell due was paid.

| CEI score | What it means |
| --- | --- |
| Below 70% | A large share of what fell due was not collected. Check for a few large overdue accounts or accounts that should be written off. |
| 70% to 80% | Below the middle. Look at what happens to invoices after the due date: follow-up often stops after the first overdue reminder. |
| 80% to 90% | Solid. You collect most of what falls due, and the gaps are usually a handful of customers. |
| 90% and above | Strong. Almost everything that fell due was paid in the period. |

The formula takes your opening receivables plus credit sales, subtracts closing receivables, and divides that by the same total minus closing current receivables. The [CEI calculator](https://www.paidnice.com/calculators/collection-efficiency-formula-calculator) does the arithmetic for you.

## Is 80% really a good CEI?

80% is closer to the middle than the top. The 80% line appears in most guides without a source. The figure we could trace is the Credit Research Foundation's own survey, the group that developed the index.

The foundation's [National Summary of Domestic Trade Receivables](https://www.crfonline.org/tools/national-summary-of-domestic-trade-receivables-results-summary/) gives a median CEI of 79.35 for the second quarter of 2026. The quarter before, the median was 73.48. A year earlier it was 79.02.

Two things follow from those figures. A score of 80% puts you roughly level with the median company in that survey, not ahead of it. And the median itself moved by about 6 points in one quarter, so a one-quarter dip in your own score is not a crisis on its own.

## Why does a good CEI depend on your terms and period?

A good CEI depends on how many invoices fall due inside the period you measure. CEI only counts money that was collectable, so invoices not yet due are left out. That is why terms move CEI less than they move DSO.

The period length is the bigger trap. On net 60 terms, a one-month window may hold only a few invoices that fell due. If one large customer pays a week late, the month's score drops sharply, then recovers the next month when the payment lands.

On net 14 terms, many more invoices fall due each month, so one late payer moves the score less. To compare fairly:

- Measure over 90 days, or a full quarter, if your terms are 45 days or longer.
- Compare the score with your own last four quarters before you compare it with anyone else.
- Look at which invoices made up the gap before you change anything. It is often one account.

## CEI vs DSO vs on-time payments: which should you watch?

CEI, DSO and on-time payments answer three different questions. Use them together, and act on the one that matches your problem.

| Metric | The question it answers | What it can hide |
| --- | --- | --- |
| Collection effectiveness index (CEI) | Of the money that fell due, how much did we collect? | How late the money arrived. A payment 50 days late still counts if it lands inside the period. |
| Days sales outstanding (DSO) | How many days of sales are sitting unpaid? | Collection quality. DSO falls when sales rise, even if collections did not improve. |
| On-time payments | What share of invoices are paid by the due date? | Size. Ten small on-time invoices can mask one large one that is badly overdue. |

If CEI is low, work on follow-up after the due date. If on-time payments are low but CEI is fine, customers pay in the end, so work on reminders before and on the due date. If DSO rises while CEI holds, check whether your sales or terms changed. The [DSO formula guide](https://www.paidnice.com/blog/dso-calculation-formula) covers how to read that one.

**On-time payment varies far more between businesses than between countries.** The typical business gets 46% of credit invoices paid on time. The top 10% of businesses get 68%, and the bottom 10% get 21%. This is on-time payment, not CEI, and it is not an industry benchmark.
Original dataSource: our analysis of invoice data from over 1,000 Paidnice customers, businesses with 100 or more invoices. See on-time payment by business.

## How do you find which customers pull your CEI down?

Sort your overdue balance by customer and look at the top few accounts. In most businesses, a small group of customers holds most of the seriously overdue money, so a low CEI usually comes down to a short list of names.

**A few customers cause most of the overdue money.** In a typical business, 2 customers in 3 never go seriously overdue. The worst 1 in 20 customers bill 24% of revenue and cause 70% of the seriously overdue money.
Original dataSource: our analysis of invoice data from over 1,000 Paidnice customers. Seriously overdue means unpaid at 75 days or paid 30 or more days late. See which customers cause late payment.

In Paidnice, each customer group has its own Insights tab with the same measures as the dashboard. In the demo below, the Slow Payers group runs at a CEI of 58.2%, against 63.5% for the whole business, which tells you where to look first.

Two patterns come up again and again in our support conversations:

- **Accounts you have already given up on.** A customer asked us for a view of this week's action list without the accounts frozen for write-off in it. Those balances drag CEI down every month until they are written off, so decide on the write-off.
- **Payments not yet reconciled.** A customer whose ledger sync ran behind was chasing invoices that were already paid. CEI reads the same ledger, so a week of unreconciled payments makes your score look worse than it is. Reconcile before you read the number.

## How do you see CEI, on-time payments and promises kept in Paidnice?

The Paidnice dashboard shows your collection effectiveness index next to on-time payments and promises kept, calculated from your accounting system. You do not have to export an aging report or run the formula.

1. **Collections effectiveness (CEI):** calculated over a trailing 90-day window, to one decimal place. The opening balance is the day before the window starts, so a single late month does not swing it the way a monthly score does.
2. **On-time payments:** the share of invoices paid by their due date.
3. **Promises kept:** promises kept divided by promises kept plus broken, for promises resolved in the window. Open and cancelled promises are left out.

The same dashboard shows DSO, days sales overdue and average days to pay, with per-group insights so you can see how each customer group pays. All of it is part of [accounts receivable reporting](https://www.paidnice.com/accounts-receivable-reporting) in Paidnice.

💡 Paidnice insight

In the example above, CEI is 63.5% while 78% of promises are kept. When most promises are kept but CEI is low, the missing money sits in invoices with no promise at all. Look first for overdue invoices that have had no follow-up since the due date.

## How do you improve a low CEI?

You improve CEI by making sure every invoice that falls due gets a follow-up, and by acting sooner on the few accounts that hold most of the overdue money. These moves work with features Paidnice already runs:

1. **Remind before and on the due date.** Set [email and SMS reminders](https://www.paidnice.com/email-sms-reminders) so customers see the invoice before it is late.
2. **Keep following up after the due date.** Each overdue reminder still helps: 45% of overdue invoices are paid within 7 days of a first reminder, and 26% with no reminder ([our reminder data](https://www.paidnice.com/blog/how-many-payment-reminders#each-reminder)).
3. **Send statements on a schedule.** A monthly statement shows the customer every open invoice in one place.
4. **Record promises to pay.** Reminders can pause until the promised date, and the invoice owner gets an email if the date passes.
5. **Escalate the top accounts to a call.** An escalation assigns a call to a person on a set day after the due date.
6. **Add [late fees](https://www.paidnice.com/late-fees) where your terms allow them.** A fee gives the slowest payers a reason to move your invoice up their list.

For the full set of receivables numbers and their targets, see [the accounts receivable KPIs](https://www.paidnice.com/blog/5-accounts-receivable-kpis). For ways to bring DSO down at the same time, see [how to reduce DSO](https://www.paidnice.com/blog/how-to-reduce-dso).

## Frequently asked questions

### Is 80% a good CEI?

80% is an acceptable CEI and roughly the middle. The Credit Research Foundation's median for the second quarter of 2026 was 79.35, so 80% puts you level with the median company in that survey. If your terms are 30 days or shorter, more invoices fall due each month, so a score above 85% is a fair aim.

### Can CEI be over 100%?

Not in the standard formula, because current receivables are part of total receivables. A result over 100% usually means credit notes or unapplied payments pushed the total balance below the current balance. Check for unallocated credits before you trust the number.

### How often should I calculate CEI?

Calculate it monthly if your terms are 30 days or shorter, and over 90 days or a quarter if your terms are longer. A short window with few invoices due lets one late payer swing the score.

### Is CEI the same as collection efficiency?

Yes. Collection effectiveness index, collections effectiveness index and collection efficiency are names for the same measure. Our [collection efficiency calculator](https://www.paidnice.com/calculators/collection-efficiency-formula-calculator) uses the standard formula.

### What is a good CEI for a small business?

The same bands apply: 80% or more is solid and 90% or more is strong. A small business has fewer invoices, so one large customer can move the score a lot. Read it over 90 days and look at which customers made up the gap.

## Paidnice features in this article

- [**AR insights and reports** Reports DSO, aged receivables and a weekly cash forecast.](https://www.paidnice.com/accounts-receivable-reporting)
- [**Email and SMS reminders** Sends reminders by email and SMS on your schedule, each with a link to pay.](https://www.paidnice.com/email-sms-reminders)
- [**Late fees and interest** Adds late fees and interest to overdue invoices when you turn them on.](https://www.paidnice.com/late-fees)

## About the editorial team

Written by Ashley Schroder Co-founder of Paidnice

Ashley is a co-founder and lead developer of Paidnice and has built accounting software for more than 10 years. He builds the ledger connections that put reminders, late fees and payments into Xero, QuickBooks and ERPs such as NetSuite and Business Central. Before Paidnice he co-founded A2X, ecommerce accounting software for Xero and QuickBooks.

Reviewed by Jack Daffron Co-founder of Paidnice

Jack is a co-founder of Paidnice and has built accounting software for more than 10 years. He builds the product that sends reminders, adds late fees and takes payments for businesses on Xero, QuickBooks and ERPs such as NetSuite and Business Central.

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