Accounts Receivable Days Formula: what is it and how to calculate it?

[Gsusangrey]

Hi everyone, I’m trying to understand the Accounts Receivable Days formula and how to use it. I know it measures how long it takes to collect payments, but I’m not sure about the exact calculation steps. Can someone explain it with a simple example?

 

[jainnorton]

Accounts Receivable (AR) Days measures how quickly a company collects payments.

Formula:

AR Days= (Average Accounts Receivable/Net Credit Sales) x Number of Days

Lower days = faster collections.

 

[Shane Warne]

Accounts Receivable Days = (Accounts Receivable ÷ Total Credit Sales) × Number of Days

Example:
= (50,000 ÷ 600,000) × 365
= 30 days

It tells you how many days, on average, it takes to collect customer payments.

 

[Jarwish]

Accounts Receivable Days measures how long, on average, a company takes to collect payments. Calculate: (Accounts Receivable ÷ Annual Credit Sales) × 365 to find the collection period in days.

 

[Mayank]

Accounts Receivable Days formula measures how long it takes a company to collect payments from customers. It is calculated as:
(Accounts Receivable ÷ Net Credit Sales) × Number of Days.
It reflects efficiency in managing credit and cash flow.

 

[riya]

Accounts Receivable Days measure how long it takes a business to collect payments from customers. The formula is:
Accounts Receivable Days = (Accounts Receivable ÷ Total Credit Sales) × Number of Days. It helps track cash flow efficiency—fewer days mean faster collections and healthier financial performance