In a common method for precision detecton of photoelectric encoders, a polyhedron is joined with a photoelectric encoder and light from an autocollimation setup is reflected by the polyhedron; the precision of photoelectric encoder is then measured by reading the numerical value of the autocollimation. A feasible method to improve measurement efficiency was investigated with respect to the main factors that affect photoelectric encoder detection. Firstly, according to the principle of autocollimator detection, a theoretical analysis was conducted by analyzing polyhedron pyramidal error as it effects the reading of the numerical value of autocollimation. Secondly, according to the principle of installation eccentricity of a polyhedron pyramidal, the impact factors that affect the measurement precision of a photoelectric encoder were analyzed in detail. Pyramidal error and installation eccentricity are the main external factors, which are determined by the numerical value reading of autocollimation. A 21-bit photoelectric absolute encoder was detected using a 23-sided polyhedron; the numerical value of autocollimation is read along the y-axis, the detection error of polyhedron pyramidal error is 7.9″, and the detection of installation eccentricity is 0.8″. The testing results indicate the effects of pyramidal error and installation eccentricity on the precision are based on the reading of the numerical value of autocollimation, which offers an guidance to improve detection efficiency.