5 Debt Collection Acronyms You Must Know About
                     
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.
5 Most Common Debt Collection 
Acronyms You Must Know
• CEI • EOM
• DSO • NSF
• ROI
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.
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.
1.                                            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.
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.
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.
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 3
rd 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 [email protected].
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