What is Accounts Receivable Turnover?
How often receivables are collected in a period.
How to calculate it
Calculate Accounts Receivable Turnover as: Net credit sales / Average accounts receivable. Pull the inputs from your connected data and track the trend over time in your dashboard.
Examples
Example 1
$1.2M credit sales / $150k average receivables = 8x; you collect receivables eight times a year.
Example 2
$1.5M in net credit sales against $180k average receivables -> 8.3x, meaning receivables are collected roughly every 44 days, close to net-45 terms.
Why it matters
Accounts receivable turnover shows how often receivables are collected in a period and indicates the efficiency of collections and the soundness of credit policy. A higher turnover means cash is recovered faster and bad-debt risk is lower. Seasonality can skew a single-period reading, so it is best viewed across comparable periods.
Benchmark context
Higher is better; compare against the payment terms you offer, since a turnover far below the implied terms suggests collection problems.
Common pitfalls
Seasonality skews single-period readings.
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