What Is Accounts Receivable Days?
Accounts Receivable Days is an accounting concept related to Accounts Receivable. It is the length of time it takes to clear all Accounts Receivable . This is useful for determining how efficient the company is at receiving whatever short-term payments it is owed.
The formula for Accounts Receivable Days is:
- (Accounts Receivable / Revenue) x Number of Days In Year
For the purpose of this calculation, it is usually assumed that there are 360 days in the year (4 quarters of 90 days). Accounts Receivable Days is often found on a financial statement projection model.
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