AR KPI Reporting Checklist
A focused set of accounts-receivable KPIs tells you whether collections are healthy and where to act. This checklist helps you build a monthly AR scorecard that people actually use.
What this checklist covers
- Select the AR KPIs that matter for your business
- Source each metric from reconciled, consistent data
- Calculate DSO, CEI, aging mix and dispute measures
- Present trends and targets, not just point values
- Tie each KPI to an owner and an action
7 min
Before you start
KPIs are only credible on clean, consistent data. Reconcile first and fix your definitions before you publish a single number.
- Confirm AR is reconciled and cash applied, so every metric starts from a sound base.
- Agree the definition of each KPI in writing so it cannot drift month to month.
- Gather prior-period values and any board or management targets.
- Decide the audience — a board pack and a collections team need different depth.
Step 1 — Choose the core KPIs
- DSO: average days to collect credit sales.
- Aging mix: percentage of AR that is current versus past due, by bucket.
- CEI (collections effectiveness index): how much of what was collectable you actually collected.
- Percentage current / overdue: a simple health line that anyone understands.
- Disputes and credit notes: value and count, as a drag on collections.
Step 2 — Calculate consistently
- Pull each input from the same reconciled source you use for the ledger.
- Apply each KPI's agreed formula and keep the basis (gross or net, GST in or out) constant.
- Recompute prior periods if a definition changed, so the trend stays honest.
- Sense-check every figure against the aged trial balance before publishing.
Step 3 — Present and drive action
- Show each KPI as a trend against target, not an isolated number.
- Add a one-line 'so what' for each metric — what it means and what to do.
- Assign an owner to any KPI that is off target.
- Archive the scorecard so next month builds on a consistent record.
The point of the scorecard is action: a rising DSO or worsening aging mix is a prompt to collect harder. The getting-paid-faster guide and our free tools turn the numbers into faster cash.
Common mistakes
- Too many metrics. A wall of KPIs hides the few that matter — keep it tight.
- Shifting definitions. Redefining a KPI mid-year quietly breaks every comparison.
- No targets. A number with nothing to compare against drives no behaviour.
- No owner. KPIs with no owner are admired, not acted on.
Key takeaways
- Pick a tight set of AR KPIs and define each one in writing
- Source every metric from the same reconciled ledger data
- Show trends against targets, with a clear so-what for each
- Assign an owner to any KPI that is off target
Frequently asked questions
What is the collections effectiveness index (CEI)?
CEI measures how much of the receivables that were available to collect in a period you actually collected, expressed as a percentage. A figure close to 100% means collections is capturing nearly all of what was collectable; a falling CEI signals a collections problem even if DSO looks stable.
How many AR KPIs should I report?
Fewer than you think — a handful that genuinely drive decisions beats a crowded dashboard. DSO, aging mix, percentage overdue and a disputes measure cover most needs. Add CEI when you want a sharper read on collections performance.
Why must KPI definitions be fixed?
Because the value of a KPI is its trend. If you change how DSO or CEI is calculated mid-year, this month is no longer comparable to last month, and any improvement or decline becomes impossible to interpret. Lock the definitions and restate history if you must change one.
Work the checklist, then get paid
Use the free Invoice Generator, then let Merion recover anything that goes unpaid — commission-only.