Average Collection Period Calculator
FinanceCalculate the Average Collection Period, the typical number of days it takes to collect receivables, cross-checked against your receivables turnover ratio.
Average Collection Period
The typical number of days between a credit sale and receiving payment.
Receivables Turnover (Cross-Check)
4.00
Days in period divided by this turnover figure should equal the Average Collection Period above.
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Frequently Asked Questions
How is Average Collection Period related to receivables turnover?
They are two views of the same underlying data: Average Collection Period = Days in Period / Receivables Turnover Ratio. Both numbers are shown here so you can cross-check your result.
What is considered a good Average Collection Period?
It depends heavily on your industry and stated payment terms, but a period noticeably longer than your own credit terms (for example, 60 days on Net 30 terms) usually signals a collections problem.
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