The AR Analytics Dashboard Explained

The charts in the AR Analytics dashboard dig deeper than the AR Summary Dashboard to assess your AR Performance. These metrics can help you measure the impact of your AR efforts and help you see trends in your AR. 

Use the filters at at the top of the page to change the date range and aggregation for some of these charts. Each chart or table can be downloaded as a CSV file if you'd like to use the data for your own reporting and analysis. These charts and tables use data from your Accounting Package that has been synced to Funding Gates. If you have not run a sync recently, it is possible that this data is little off from the totals in your Accounting Package. To keep this data as accurate as possible, we recommend running syncs daily. 

Below is an explanation of each metric and how it is calculated. 

 

Days Beyond Terms

Days Beyond Terms (DBT) measures the average number of days it takes for an overdue invoice to be paid. This calculation is based on the amount of AR in each past due aging bucket for today. 

Funding Gates uses the following industry-accepted formula to calculate DBT:

DBT = ((Total dollars in 1-30 days bucket x 15) +  (Total dollars in 31-60 days bucket x 45) + ( Total dollars in 61-90 days bucket x 75) + (Total dollars in 91+ days bucket x 105)) / Total Outstanding AR 

 

Days Sales Outstanding

Days Sales Outstanding (DSO) measures the average days it takes for an invoice to get paid. DSO is different from DBT because it includes current invoices in its calculation. It is good to look at both DBT and DSO. 

Funding Gates uses the following formula for DSO: 

DSO =                  A/R____        x Number of days

             Credit Sales for Period

 

Best Possible DSO

Best Possible Days Sales Outstanding (Best DSO) measures the quickest payment you can expect on a invoice.

Best DSO is calculated with this formula: 

Best DSO =          Current A/R            x Number of days

                  Credit Sales for Period

 

Average Days Delinquent

Average Days Delinquent (ADD) shows the time frame between the average days it takes to collect on current invoices and the average time it takes to get paid from all invoices (current and overdue).  ADD is sometimes called Delinquent DSO.

ADD is calculated with this formula: 

Average Days Delinquent (ADD) = Standard DSO — Best Possible DSO

 

Collection Effectiveness Index

Collection Effectiveness Index (CEI) measures what percentage of your AR is successfully collected for a month. CEI is a great way to measure the quality of your AR efforts. 

CEI =  Beginning A/R + (Credit Sales/Number of days in the month) - Ending A/R                    X 100

          Beginning A/R + (Credit Sales/Number of days in the month) - Ending Current A/R

 

Past due as a % of Total AR

Simply put, this chart shows what percentage of your AR is past due at any given time. Ideally, you want as this percentage to be low or dropping.  

 

 

 

 

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