Difference between revisions of "Calculate Accounts Receivable Collection Period"
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Businesses both large and small often sell their product to their customers on credit. Credit sales, unlike cash transactions, must be carefully managed in order to ensure prompt payment. Mismanaged accounts can lead to slow or late payments and default. One way to keep track of credit sales is to analyze the related financial ratios, such as the average collection period. Learning how to calculate the accounts receivable collection period will help your business keep track of how quickly payments can be expected. | Businesses both large and small often sell their product to their customers on credit. Credit sales, unlike cash transactions, must be carefully managed in order to ensure prompt payment. Mismanaged accounts can lead to slow or late payments and default. One way to keep track of credit sales is to analyze the related financial ratios, such as the average collection period. Learning how to calculate the accounts receivable collection period will help your business keep track of how quickly payments can be expected. | ||
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==Steps== | ==Steps== | ||
