The Indian accounting practice of applying money received against the specific invoices it pays. When a customer's lump-sum payment covers eleven invoices, two credit notes and a TDS deduction, each rupee must be 'knocked off' against its line — in Tally or the ERP — or the aging report and the reminders both start lying. The term is universal on Indian finance desks yet almost never defined in writing; this is the definition.
The average number of days revenue spends as receivables before becoming cash: (accounts receivable ÷ credit sales) × days. Global all-industry DSO runs near 59 days; logistics typically sits at 45–60. The number that matters is yours against your terms — collecting at 68 on NET-30 means five weeks of interest-free lending per invoice.
The share of collectable receivables actually collected in a period — a quality measure that complements DSO's speed measure. Above 80% is considered good; 90%+ is excellent. A desk can have decent DSO and poor CEI if it collects the easy money and lets the hard cases age.
The standard classification of open invoices by days outstanding: 0–30, 31–60, 61–90, 90+. Escalation logic keys off buckets; the 90+ bucket is a warning and the 180+ region is a write-off forecast — industry data suggests ~80% of payments delayed past 180 days are never collected.
The structured sequence of payment reminders sent before formal collections — in the B2B trade-credit sense: scheduled, escalating, tone-managed messages. (Much web content uses 'dunning' for SaaS card-retry emails; freight dunning is a different discipline where relationships and tone carry real weight.)
The monthly summary of a customer's invoices, credit notes, payments and outstanding balance. In Indian and GCC freight, the SOA — not the individual invoice — is the de facto payment document: customers reconcile and pay against it, which is why lump-sum receipts and SOA-level knock-off are the norm.
Money received but not yet matched to specific invoices. It overstates your true receivables, hides real risk, and — worst — lets reminders chase invoices that were already paid inside some lump sum. A healthy book runs unapplied cash near zero.
A tracked commitment from a customer to pay by a stated date. Recording the promise, going silent until the date, and following up that exact morning if it slips is the collections discipline that lets polite tones outperform aggressive ones. The promise-kept rate per customer feeds tiering.
A customer paying less than invoice value and moving on — logistics' default dispute mechanism. Causes range from a contested detention line to a TDS deduction that isn't a dispute at all. The critical move is diagnosis: separate genuine disputes from mechanical deductions, and collect the undisputed balance now.
Indian withholding tax — typically 1–2% under Section 194C on freight payments — that customers deduct before paying. Every receipt arrives short of invoice value by design; the shortfall is booked as a TDS receivable and reconciled against Form 26AS, not chased as unpaid revenue.
A cheque written for a future date, used across the GCC (and India) as a deferred-payment commitment. A drawer of PDCs is not collected cash: each needs deposit-date tracking, a pre-deposit courtesy nudge, and immediate bounce handling. Cheque-in-hand and cash-in-bank are two different truths.
Post-invoice adjustments that reduce (credit) or increase (debit) what a customer owes. In India these are GST documents that must reference the original invoice — and in collections they matter because SOA payments routinely net them off, complicating knock-off.
Demurrage: charges for a container occupying the terminal beyond free days. Detention: charges for keeping the carrier's equipment outside the terminal too long. Both are pass-through charges that arrive late, get disputed often, and block otherwise-clean invoices — separating them into their own line items protects the rest of the balance.
The signed document proving cargo was delivered. In much of Indian B2B logistics the rule is 'no POD, no payment' — the customer's payment clock starts when the signed POD reaches their accounts team. Sometimes the fastest collections action is chasing the paper, not the customer.
The forwarder's right to hold cargo or documents against unpaid charges, typically under standard trading conditions. Powerful when you have possession, weak after release — which is why it's a negotiating backdrop, not a collections strategy.
Offsetting mutual receivables and payables between partner forwarders into one periodic settlement — you owe your Dubai agent on three jobs, they owe you on five, one payment closes all eight. Standard practice in forwarder networks; invisible to generic AR tools.
The maximum exposure and payment window (NET-30/60/90) extended to a customer. In a well-run loop, collections data sets these: on-time payers earn better terms on their next quote, chronic late-payers earn advance terms — automatically, not annually.
Coface's term for payments overdue beyond 180 days. Their Asia survey finding worth memorizing: when ULPDs exceed 2% of a company's turnover, distress risk is elevated — and roughly 80% of ULPD amounts are never paid at all.
Financing receivables: factoring sells the invoice (the factor collects); discounting borrows against it (you still collect, confidentially). Freight factoring advances 80–90% of face value within days — for a fee, forever. Collecting five days faster releases similar cash for free, which is why collections improvement should precede financing.
The cash a business must keep tied up to fund its operating cycle, often expressed in days of turnover. Global WCR runs around 76 days; every day of DSO you remove releases one day of turnover in cash — the arithmetic our calculator runs on your numbers.
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