Accounts Receivable Turnover Calculator
Calculate how many times you collect average receivables in a period, and the implied days to collect.
How is accounts receivable turnover calculator worked out?
Accounts receivable turnover is net credit sales divided by average accounts receivable. It counts how many times you collect your average receivables balance in a period — a turnover of 8 means roughly every 46 days.
Accounts Receivable Turnover Calculator
AR turnover
7.83×
- Implied days to collect
- 46.6 days
- Equivalent to DSO for the same period.
- Average accounts receivable
- $230,000.00
Show the working
| Net credit sales | $1,800,000.00 |
| Opening receivables | $210,000.00 |
| Closing receivables | $250,000.00 |
| Average receivables | $230,000.00 |
| AR turnover | 7.83× |
| Days to collect | 46.6 days |
Turnover and DSO describe the same thing from opposite directions: turnover counts collection cycles per period, DSO counts days per cycle. Turnover is the form lenders and analysts tend to use, because it sits alongside inventory and payables turnover in the same working-capital picture.
The formula
Average accounts receivable = (beginning AR + ending AR) ÷ 2
AR turnover = net credit sales ÷ average accounts receivable
Days to collect = days in period ÷ AR turnoverAveraging the opening and closing balances matters when receivables move a lot during the period — using the closing balance alone makes a business that had a strong final month look slower at collecting than it is.
Turnover and DSO are the same measurement
Divide the days in the period by the turnover ratio and you get DSO; divide the days by DSO and you get turnover. Which one to use is a matter of audience. Turnover reads naturally next to inventory turnover and payables turnover in a working-capital analysis, and is what a lender's spreadsheet expects. DSO is easier to act on internally, because "we are collecting in 46 days on 30-day terms" tells a team what to do in a way that "turnover is 8" does not.
What moves the ratio besides collections
A higher turnover is generally better, but not unconditionally. Tightening credit — refusing terms to slower-paying customers, or demanding payment up front — raises turnover while potentially costing sales that were profitable. Growth does the opposite: a business selling more each month carries proportionally more recent, not-yet-due receivables, which depresses turnover without anything having gone wrong. Read the ratio alongside the aging profile, which distinguishes receivables that are merely new from receivables that are late.
Frequently asked questions
How do you calculate accounts receivable turnover?
Divide net credit sales for the period by average accounts receivable, where the average is the opening balance plus the closing balance divided by two. Net credit sales of 1.8 million against average receivables of 230,000 gives a turnover of about 7.8.
What is a good accounts receivable turnover ratio?
It varies widely by industry and by the terms you offer, so the meaningful comparisons are against your own trend and against peers on similar terms. Converting the ratio to days and comparing that with your stated payment terms is usually more informative than the raw number.
What is the difference between AR turnover and DSO?
They are two expressions of the same relationship. Turnover counts how many times you collect your average receivables in a period; DSO converts that into the average number of days a receivable stays outstanding. Days in the period divided by turnover gives DSO.
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Related calculators
- DSO CalculatorCalculate Days Sales Outstanding to see how accounts receivable compares with credit sales.
- Average Collection Period CalculatorCalculate how many days it takes, on average, to collect payment from customers.
- AR Aging CalculatorEnter outstanding invoices to see current, 1–30, 31–60, 61–90, and 90+ day receivable balances.
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