Question by  Venki (19)

How do you calculate average receivable days?

I am working on an accounting project and have no idea how to do this.


Answer by  tamarawilhite (17883)

Accounts receivable is the time from when you send the bill to the time when you receive payment. A business wants this number as low as possible.


Answer by  Gabriel (2146)

You can compute average days receivable by dividing your average Accounts Receivable by Sales times 360 days. Here's how it looks mathematically: (Average Accounts Receivable) / (Sales X 360 days). You can find the Average Accounts receivable by averaging the beginning AR and the 12 end of the month AR, this helps smooth seasonal trends.

You have 50 words left!