Measures the time taken to collect payment after a sale.

What it Measures ?

How long customers take to pay us.

Relevant StakeHolders 

AR Team, Sales Finance

In-depth Use Case / Real-world Example

Accounts Receivable Turnaround Time is the average number of days it takes for a company to collect payment from customers after a sale has been made. For example, if a company’s average accounts receivable is ₹300,000 and the total credit sales amount to ₹1,200,000 annually, the turnaround time would be approximately 90 days. Shortening this time is essential for maintaining liquidity and reducing bad debt. Efficient collection processes are critical to ensuring a company has adequate cash flow for its operations.