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Average Collection Period Calculator

This calculator requires the use of Javascript enabled and capable browsers. This script is one of several termed as operational ratios. This measures the average number of days that customers take to pay your billings. It indicates the effectiveness of the business credit and collection policies and if the credit terms are realistic and warranted. The number of days in the measurement period is usually a year unless you are working with a fewer number of months. Our default is 365. The opening and closing balances for AR are the averages for the measurement period; again, that is usually 12 months. To find those figures, accumulate the opening values for AR for each of the months in the measurement period and divide them by that number of months. The same is true for closing balances. The closing balance for one month should be the opening balance for the next. Enter the annual sales value total. Finally click on Calculate to see the average collection period.

Required Data Entry
AR Opening Balance (average of 12 months) Dollars
AR Closing Balance (average of 12 months) Dollars
Days In Measurement Period (annual) Days
Total Net Sales (Annual) Dollars

Calculated Results
Average Collection Period Days
Updated 8.15.11

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