Optimize Cash Flow: Accounts Receivable Turnover Calculator
Accounts Receivable Turnover Calculator
Measure how efficiently your company collects its credit sales by calculating the Accounts Receivable Turnover ratio.
Input Your Data
Total credit sales during a period, less any returns or allowances.
Accounts receivable balance at the start of the period.
Accounts receivable balance at the end of the period.
Your Results
Average Accounts Receivable:
$0.00
The average balance of accounts receivable over the period.
Accounts Receivable Turnover:
0.00 times
Indicates how many times a company collects its average accounts receivable during a period.
How It Works
- Enter your total net credit sales for the period.
- Input the accounts receivable balance at the beginning of the period.
- Provide the accounts receivable balance at the end of the period.
- Click "Calculate" to see your average accounts receivable and the turnover ratio.
- The "Clear" button will reset all fields.
Formula for Average Accounts Receivable: (Beginning Accounts Receivable + Ending Accounts Receivable) / 2
Formula for Accounts Receivable Turnover: Net Credit Sales / Average Accounts Receivable
Interpretation: A higher turnover ratio generally indicates efficient collection of credit sales.
How the receivables turnover calculator works
Accounts receivable turnover shows how many times a business collects its average receivables during a period. A higher number means customers pay faster. Enter net credit sales and the opening and closing receivables.
Average collection period = 365 ÷ Receivables turnover
Worked example
Net credit sales are 240,000. Opening receivables are 30,000 and closing receivables are 50,000, so the average is 40,000. Turnover = 240,000 ÷ 40,000 = 6 times. Average collection period = 365 ÷ 6 = about 61 days.
Frequently asked questions
Why use credit sales and not total sales?
Only credit sales create receivables. Including cash sales would overstate how quickly customers pay.
What is a good receivables turnover?
Compare the collection period with your credit terms. If terms are 30 days and customers take 61, collections are slow.
Related: Accounts receivable · Bad debt · Working capital · All calculators
