Receivables Turnover
Short answer
Receivables turnover is how many times per year you collect your average accounts receivable balance.
Formula
Receivables Turnover = Revenue / Accounts Receivable
Annual revenue divided by accounts receivable on the balance sheet.
Why it matters
Higher turnover = faster collections = stronger cash flow. Falling receivables turnover is one of the earliest warning signs that customer credit quality is deteriorating.
Benchmarks
People also ask
Common questions about Receivables Turnover
What is Receivables Turnover?+
Receivables turnover is how many times per year you collect your average accounts receivable balance.
How is Receivables Turnover calculated?+
Annual revenue divided by accounts receivable on the balance sheet.
What is a good Receivables Turnover?+
A healthy receivables turnover is typically around ≥ 12×/yr — fast-paying customers. Specific targets vary by industry and stage; check our benchmarks above for your sector.
Why does Receivables Turnover matter?+
Higher turnover = faster collections = stronger cash flow. Falling receivables turnover is one of the earliest warning signs that customer credit quality is deteriorating..
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