economy
 






 

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.

 
+4

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.

 
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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.

 
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