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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.

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5 Debt Collection Acronyms You Must Know About

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  1. 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. You’re 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 don’t understand.

  2. 5 Most Common Debt Collection Acronyms You Must Know • EOM • NSF • CEI • DSO • ROI

  3. 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.

  4. 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.

  5.  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, it’s common to use a MOM (Middle of the Month) payment date as a perk for a discount.

  6. 4. NSF Non-Sufficient Fund. It indicates insufficient funds in the bank account  of  the check 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.

  7. 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, it’s crucial to take into account how many staff hours you are spending attempting to collect on an overdue payment.

  8. 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 in3rd 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@debtnirvana.com.

  9. Are You looking for the most optimistic debt recovery or Debt Collection Service india? Hire our expert debt collectors todays! Contact us : Us : 101 California Street               Suite 2710 , sun francisco,          CA 94111 Phone : 415 6516478 India    : Kalkaji ,               New Delhi               PIN – 110019 Phone : +919810010294                0129-4040294

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