This accounts-receivable calculator estimates average receivables, receivables turnover, and average collection period over an analysis period.
Finance
Average Collection Period Calculator
Calculate average receivables, turnover, and collection period.
Calculator
About this calculator
Formula notes
average receivables = (beginning + ending) / 2; turnover = net credit sales / average receivables; collection days = analysis days / turnover.
Worked examples
- Example: 365 days with beginning 80,000, ending 120,000, and 1,000,000 net credit sales gives average 100,000, turnover 10, and 36.5 days.
- With 90 days, beginning receivables 50,000, ending 70,000, and 300,000 net credit sales, average receivables are 60,000, turnover is 5, and collection period is 18 days.
How to use it
- Enter the analysis period in days.
- Enter beginning and ending receivables.
- Enter net credit sales and review the three results.
Frequently asked questions
Should sales include cash sales?
Use net credit sales when available, because collection timing concerns receivables from credit sales.
What if collection days are long?
Longer periods indicate cash is tied up in receivables; combine with payables and inventory metrics for a fuller picture.
Limits and interpretation
- The metric assumes the entered net credit sales and receivables cover the same accounting period and currency; seasonal businesses should use annualized or weighted balances carefully.
- Collection period is an average and can hide concentration, overdue accounts, and customer credit quality.