If you can’t measure it, you can’t improve it.
In accounts receivable, intuition is not a strategy — data is.
Tracking the right collection metrics lets you spot problems early, allocate effort efficiently, and maintain predictable cash flow.
In this guide, Paul Boyce, commercial collections expert with over 30 years of experience, explains which numbers truly matter and how they guide better decisions before an account ever reaches a collection agency.
Why Metrics Matter in Collections
Collection success isn’t luck — it’s the result of consistent monitoring.
Without clear performance data, slow payers slip through, credit terms drift, and recoveries decline silently.
Accurate metrics help you:
- Detect risk before invoices age out.
- Benchmark performance against industry norms.
- Strengthen your credibility with management and auditors.
- Decide when professional escalation is financially justified.
“Collections thrive on visibility. You can’t fix what you can’t see.”
The 6 Metrics That Matter Most
1️⃣ Days Sales Outstanding (DSO)
Measures the average time it takes to collect payment.
Lower DSO = faster cash conversion.
Formula:(Accounts Receivable ÷ Total Credit Sales) × Number of Days
2️⃣ Average Days Delinquent (ADD)
Shows how far past due invoices typically run.
A rising ADD signals tightening cash among your customers.
3️⃣ Collection Effectiveness Index (CEI)
Evaluates how much of your receivables were actually recovered within a given period.
CEI over 80 % usually indicates strong internal follow-up.
4️⃣ Promise-to-Pay Ratio
Tracks how many verbal or written promises are actually fulfilled.
Low ratios reveal either poor screening or ineffective communication.
5️⃣ Dispute Rate
The percentage of invoices delayed because of errors or disagreements.
High dispute rates mean your documentation or order process needs review.
Documentation Mistakes That Cost You Collections
6️⃣ Escalation Rate
Shows what portion of delinquent accounts require third-party help.
A balanced target keeps internal efforts efficient while flagging when outside agencies can add value.
Using Metrics to Improve Results
Step 1 – Collect Consistent Data
Use your accounting system or CRM to pull the same fields monthly.
Step 2 – Visualize Trends
Charts reveal patterns faster than spreadsheets.
Using Technology to Improve A/R Recovery
Step 3 – Set Benchmarks
Compare your DSO and CEI to prior quarters, not just to peers.
Step 4 – Act on the Findings
When DSO rises or promises-to-pay fall, adjust policies immediately.
Step 5 – Review With Your Agency Partner
Share high-level metrics with your collection agency to align strategy and timing.
Expert Insight from Paul Boyce
“Good metrics tell you when to act — not just what happened.
The right numbers reveal risk while you still have leverage.”
🔗 Related Articles
- Documentation Mistakes That Cost You Collections
- Using Technology to Improve A/R Recovery
- How to Work Effectively With a Collection Agency
Key Takeaways
- Track performance monthly; trends expose risk early.
- DSO, CEI, and Dispute Rate are leading indicators of cash health.
- Data-driven escalation decisions maximize recoveries and protect relationships.
Need Clarity Before You Escalate?
Get a confidential review with Paul Boyce, Commercial Collections Expert.
If your metrics reveal growing risk, I can connect you with a licensed commercial collection agency that handles these matters ethically and effectively.