What Is an Accounts Receivable Collection Period?

The average collection period of accounts receivable refers to the speed of collection of accounts receivable in current assets, and is a supplementary indicator of the turnover rate of accounts receivable.

Accounts receivable average collection period

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The average collection period of accounts receivable refers to the speed of collection of accounts receivable in current assets, and is a supplementary indicator of the turnover rate of accounts receivable.

The shorter the average collection period of accounts receivable, the stronger the ability of the accounts receivable to realize. The criterion for evaluating this indicator is based on the account repayment period stipulated in the company's credit sales conditions and the company's credit sales policy. If the actual payback period exceeds the repayment period stipulated by the enterprise, it indicates that the capital operation efficiency is not high.

1 Liang Shengfang, editor.Explaining Accounting Problems of Foreign Trade and Economic Cooperation [M] .ISBN: 7-80004-479-3 / F752.6-44.China Foreign Economics and Trade Press, 1996

2 Xia Zimin, Zhao Kaitai, editor. Handbook of calculation commonly used in modern enterprise financial management [M] .ISBN: 7-5429-0519-8 / F275. Lixin Accounting Press, 1998 ^[1]