5 Debt Collection Acronyms You Must Know About

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5 Debt Collection Acronyms You Must Know
About  Most people believe they are familiar
with common abbreviations and terminology. But
then again, every sector has its own set of
jargon and acronyms. And the debt collection
sector is no exception. Youre bound to hear some
unfamiliar phrases whether you work with your
accounts receivable department or a Debt
Collection Company. But you should never feel
ashamed to ask someone to define words you dont
understand.
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5 Most Common Debt Collection Acronyms You Must
Know

• EOM
• NSF

• CEI
• DSO

• ROI

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1. CEI The Collection Effectiveness Index.
Organizations use this measurement to assess the
success of their collection operations. Many
believe the CEI is more accurate than the DSO
(see below). CEI is calculated as the sum of
initial receivables and monthly credit sales less
ending total receivables. After that, divide that
amount by the total of the opening receivables
and the monthly credit sales less the current
closing receivables. For a percentage, multiply
the result by 100. The closer your percentage is
to 100, the more effective your efforts will be.
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2. DSO The Days Sales Outstanding. DSO is known
as the average number of days it takes for a
business to collect income after a sale. It can
be computed monthly, quarterly, or annually. A
simple formula divides the amount of accounts
receivable for a particular period by the total
value of credit sales over the same period. And
then multiply the outcome by the number of days
in the period measured.
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•                                            3. EOM
•                  The End of the Month. This is a
  typical invoice phrase. It is critical to define
  whether payment is due at a given point in the
  month or after a set number of days. However,
  its common to use a MOM (Middle of the Month)
  payment date as a perk for a discount.

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4. NSF Non-Sufficient Fund. It indicates
insufficient funds in the bank account  of  the ch
eck writer. It is essential to understand why a
check  bounces.NSF is  not the only reason for
check bounce. We also encountered the 
reasons  like account closed and account could
not be located. And  understanding the true
issue at hand while trying to collect payment is
crucial for developing a workable solution.
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5. ROI  Return on Investment. It is a common
business word that is highly pertinent in  debt
collection. Normally, ROI is determined by
deducting the initial investment from the final
value. However, when it comes to collections,
its crucial to take into account how many staff
hours you are spending attempting to collect on
an overdue payment.
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Conclusion  We hope that the information in this
blog will help you better comprehend collection
jargon while dealing with collection agencies.
And If you are seeking a qualified debt
collection agency, Debt Nirvana is the best
option. We have extensive knowledge and great
expertise in 3rd party debt collection. At Debt
Nirvana, you will receive the best
debt-collecting service in India. To leverage our
services or learn more about us, please get in
touch with us at rvm_at_debtnirvana.com.
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